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A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each graph represents total cost and the horizontal axis represents the level of activity (volume).

A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each graph represents total cost and the horizontal axis represents the level of activity (volume).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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9:26 AM O N a * ll 26 A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each graph represents total cost and the horizontal axis represents the level of activity (volume). 2 3 FPPE 5 10 11 12
Transcribed Image Text:9:26 AM O N a * ll 26 A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each graph represents total cost and the horizontal axis represents the level of activity (volume). 2 3 FPPE 5 10 11 12
9:26 AM O - * ll 26 For each of the following situations, identify the graph that illustrates the cost behavior pattern involved (any graph may be used more than once). Just write the graph number that represents the cost: for example if you think that graph#11 represents a cost then simply type 11 in the box. a) Electricity bill – a flat fixed charge, plus a variable cost after a certain number of kilowatthours are used. b) City water bill, where the first 1,000,000 gallons or less is $1,000 flat fee; Next 10,000 gallons are $0.003 per gallon used; Next 10,000 gallons are $0.006 per gallon used; and Next 10,000 gallons are $0.009 per gallon used; and so on... c) Depreciation of equipment, where the amount is computed by the reducing balance method.
Transcribed Image Text:9:26 AM O - * ll 26 For each of the following situations, identify the graph that illustrates the cost behavior pattern involved (any graph may be used more than once). Just write the graph number that represents the cost: for example if you think that graph#11 represents a cost then simply type 11 in the box. a) Electricity bill – a flat fixed charge, plus a variable cost after a certain number of kilowatthours are used. b) City water bill, where the first 1,000,000 gallons or less is $1,000 flat fee; Next 10,000 gallons are $0.003 per gallon used; Next 10,000 gallons are $0.006 per gallon used; and Next 10,000 gallons are $0.009 per gallon used; and so on... c) Depreciation of equipment, where the amount is computed by the reducing balance method.
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