Zhang Corporation wants to identify the behavior of the three costs shown below. Cost information is provided for six months.

Required

a. Calculate the cost per unit (rounded to the nearest cent), and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs.
Explain the reasoning behind your answers.

b. Why is it important to identify how costs behave with changes in activity?

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Cost 1 Cost 2 Cost 3 Costs Costs Costs Units Total per Total per Total per Month Produced Costs Unit Costs Unit Costs Unit 1 18,000 $36,000 $19,800 $5,000 2 16,000 32,000 19,200 5,000 3 14,000 28,000 18,200 5,000 4 12,000 24,000 16,800 5,000 5 10,000 20,000 14,500 5,000 6 8,000 16,000 12,000 5,000