Exercises: Set A 27. Identifying Cost Behavior. Zhang Corporation is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months. Cost 1 Cost 2 Cost 3 Month Units Produced Total Costs Cost per Unit Total Costs Cost per Unit | Total Costs Cost per Unit 18,000 $36,000 $19.800 $5,000Cost 1 Cost 2 Cost 3 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 28. Required: a. Calculate the cost per unit, 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?High-Lose Method. (la-stanza (CompanyI produces computer printers. Management wants to estimate the cost of production equipment used to produce printers. The company reported the following monthly cost data related to production equipment: Reporting Period Month] Machine Hours 3 m m m Deoember 980,000 5-4,, Required: a. Use the four steps of the highiow method to estimate total fixed costs per month and the variable cost per machine hour. State 1il'our results in the cost equation form 'r =f+ so: by filling in the dollar amounts for f and v. Is. What would Castanza Company's estimated costs be if it used sumo machine hours next month? I:. What would Castanza Company's estimated costs be if it used 15,011] machine hours next month? Why should you feel uncomfortable estimating costs for limit] machine hours