Global anticipates an increase in productive output to 100,000 units and sales of 95,000 units in the next accounting period. The company uses appropriate drivers to determine cost behavior and estimates.

Required:

1. Assuming that present cost behavior patterns continue, compute the total expected costs in the upcoming accounting period.

2. George Levy is about to prepare a graph that shows the unit cost behavior for variable selling and administrative cost. If the graph's horizontal axis is volume and the vertical axis is dollars, briefly describe what George's graph should look like.

3. Determine whether the following costs are variable or fixed in terms of behavior:

a) Yearly lease payments for a state-of-the-art cutting machine;

b) A fee paid to a consultant who provided advice about quality issues. The fee was based on the number of consulting hours provided;

c) Cost of an awards dinner for "star" salespeople.

Manufacturing costs: Direct materials Direct labor Variable overhead Fixed overhead Selling and administrative costs: Variable Fixed $15 8 11 6 5 2