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# Cost Behavior patterns: match a graph

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Problem 1. For each of the description, choose a graph that best describes it. The graphs are in the image file. There are 12 graphs labeled a through l.

1. The salary costs of the shift supervisors at a truck depot. Each shift is eight hours. The depot perates with one two, or three shifts at various times of the year.

2. The salaries of the security personnel at a fctory. The security gurard are on duty around the clock.

3. The wages of table-service personnel in a resturant. The employees are part-time workers, who can be called upon for as little as two hours at a time.

4. The cost of electricity during peak-demand periods is based on teh following schedule.
Up to 9,500 kilowatt-hour (kwh).................\$ 10 per kwh
Above 9,500 kilowatt-hours......................R 13 per kwh

5. The cost of sheet metal used to manufature automobiles.

6. The cost of utilities at a university. For low student enrollments,
utility costs increase with enrollment, but at a decreasing rate. For large student enrollments, utility costs increase at an increasing rate.

7. The cost of telephone service, which is based on the number of message units per month. The charge is \$ 0.8 per message unit, for upt to 700 message units. Additional message units (above 700) are free.

8. The cost of the nursing staff in a hospital. The staf always has a minimum of nine nurses on duty. Additional nurses are used dependng on the number of patients in the hospital. The hospital administrator estimates that this additional nursing staff costs approximately \$195 per patient per day.

9. The cost of chartering private airplane. The cost is \$390 per hour for the first three hours of a flight. Then the charge drops to \$280 per hour.

10. Under a licensing agreement with a South American import/export company, your firm has begun shipping machine tools to several countries. The terms of the agreement call for an annual licensing fee of \$100,000 to be paid to the South American import company if total exports are under \$5,000,000. For sale in excess of \$5,000,000, an additional licnsing fee of 10 percent of sales is due.

11. Your winery expots wine to several Pacific Rim countries. In one nationa, you must pay a tariff for every case of wine brought into the country. The tariff schedule is the following:
0 to 5,500 cases per year...................\$12 per case
5,501 to 11,000 per cases per year..........\$15 per case
Above 11,000 cases per year.................\$20 per case

#### Solution Preview

1. The salary costs of the shift supervisors at a truck depot. Each shift is eight hours. The depot operates with one, two, or three shifts at various times of the year.

Graph (e) - Depending on the shift the cost will increase and the shape will be a step graph with one, two of three shits

2. The salaries of the security personnel at a factory. The security guard is on duty around the clock.

Graph (a) - This is a fixed cost which would not vary

3. The wages of table-service personnel in a restaurant. The employees are part-time workers, who can be called upon for as little as two hours at a time.

Graph (g) - The graph will be rising step graph depending on how many people are called upon

4. The cost of electricity during peak-demand periods is based on the following schedule.
Up to 9,500 kilowatt-hour (kwh).................\$ 10 per kwh
Above 9,500 kilowatt-hours......................R 13 ...

#### Solution Summary

The solution explains how to match the given graphs with the cost behavior patterns

\$2.19