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Kozy Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output quantities as shown
Kozy Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output quantities as shown below:
Output in Units | Rent Expense | Direct Materials | ||||||
1,000 | $5,000 | $ 4,000 | ||||||
2,000 | 5,000 | 6,000 | ||||||
3,000 | 5,000 | 7,800 | ||||||
4,000 | 7,000 | 8,000 | ||||||
5,000 | 7,000 | 10,000 | ||||||
6,000 | 7,000 | 12,000 | ||||||
7,000 | 7,000 | 14,000 | ||||||
8,000 | 7,000 | 16,000 | ||||||
9,000 | 7,000 | 18,000 | ||||||
10,000 | 10,000 | 23,000 | ||||||
11,000 | 10,000 | 28,000 | ||||||
12,000 | 10,000 | 36,000 |
(a) Based on the information above, choose the correct diagram for the behaviour of each cost for output ranging from 1,000 to 12,000 units.
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