LO.2 (Cost behavior) Spirit Company produces baseball caps. The company incurred the following costs to produce 12,000 caps last month:

Cardboardforthebrims $ 4,800

Cloth $12,000

Plastic for headbands $6000

Straight-line depreciation $7200

Supervisors salaries $19200

Utilities $3,600

Total $52,800

a. What did each cap component cost on a per-unit basis?

b. What is the probable type of behavior that each of the costs exhibits?

c. The company expects to produce 10,000 caps this month. Would you expect each type of cost to increase or decrease? Why? Can the total cost of 10,000 caps be determined? Explain.