19.1 Billericay Ashworth Limited makes tennis racquets. In an average month it produces about 3000 racquets. The following are some of the costs the company incurs:

• Cost of raw materials. Each racquet uses £13.00 of raw materials.

• Factory insurance. The cost for a month is £800.

• Telephone charges. The company has several telephone lines. Its line rental charges per month are £1000. If no calls are made, the call charge is £0. On average 500 calls cost a total of £250 and 1000 calls, on average, cost £500. In most months about 1500 calls are made in the company.

You are required to:

i) Classify each of the above costs as one of the following:

• variable

• fixed

• stepped

• semi-variable.

ii) Using either graph paper or a spreadsheet program graphing facility plot each of these costs onto a separate graph. Activity levels should be on the horizontal (x) axis and costs on the vertical iy) axis.