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b) The following graph is given as an example of the cost characteristic of a variable cost: f cost Activity (i.e. output or usage) REQUIRED:
b) The following graph is given as an example of the cost characteristic of a variable cost: f cost Activity (i.e. output or usage) REQUIRED: Prepare a graph for each of the following situations (NOTE: The shape of the graphs is more important than their detailed scaling): 1) Rates of the factory premises for half a year costing $50,000. ii) The company telephone account comprising of a quarterly charge of $100 and a cost per call of E0.40. iii) A quantity discount agreement: 5% discount when the monthly order exceeds $2,000 10% discount when the monthly order exceeds $5,000 20% discount when the monthly order exceeds f10,000 iv) A car hire agreement whereby there is: A minimum weekly charge of $50 A charge per mile of fo.10 A maximum weekly charge of f100 V) A labour rate of f1.00 per piece produced in normal time and f1.30 in overtime. vi) Depreciation on Reducing Balance Method vii) A salesman's salary of f1,000 per month with a bonus of 20% if the sales target is achieved.1uriii} A cost of service is a flat charge of 400 ever the first 5,000 units of output. Then per unit tests above this are as follows: 0.10 for the next 3,000 units, 0.12 for the next 3,000 units and 0.14 for all subsequent units
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