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Question $1$

The following graphs represent various cost behaviour patterns. The vertical axis represents costs and the

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For each of the following situations, identify which graph illustrates the cost behaviour pattern involved. Any graph can be used more than once.

a$)$ Data usage charges on a smartphone plan $-$ there is a flat rate for the $2GB$ plus a variable fee of $$10$ per MB for any data usage that exceeds the $2GB.$

b$)$ Wages for the software developers whom all earn a fixed monthly salary.

c$)$ Provincial government fees to obtain licenses for dog sled tours. There is a $$10$ fee for the first $1,000$ tours, with no additional fees for any tours that exceed $1,000.$

d$)$ Cost of raw materials, where the cost starts at $$7\mathrm{.}50$ per unit and then decreases by $$0\mathrm{.}05$ per unit for each of the first $100$ units purchased, after which it remains constant at $$2\mathrm{.}50$ per unit.

e$)$ Cost of a monthly high$-$speed internet plan, where $$50$ is charged for the first $25GB$ of usage, $$75$ for $25\mathrm{.}1$GB$-50$GB usage, $$100$ for $50\mathrm{.}1GB-75GB$ usages, and $$125$ for $75\mathrm{.}1GB+.$

f$)$ Wage expenses for tree planters who earn a rate of $$0\mathrm{.}10$ per tree planted.

g$)$ Rent of a factory building donated by the government where the agreement calls for $$100,000$ less $$1$ for each direct labour hour worked in excess of $200,000$ hours, but a minimum rental payment of $$20,000$ must be paid.

n$)$ Wages paid to sales staff who receive a fixed salary per month and sales commissions equal to $5\%$ of sales for every sales dollar they generate above $$250,000.$ No additional commissions are paid for sales above $$1,000,000.$

i$)$ Raw materials costs, where the first $1,000$ units cost $$1$ per unit, with the unit cost dropping to $$0\mathrm{.}80$ per unit for quantities above $1,000.$

How would knowledge of cost behaviour patterns such as those above help managers analyze the cost structure of his$/$her company?

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