Mining, Inc., is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months. Cost 1 Cost 2
Mining, Inc., 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 |
1 | 8,000 | $10,000 | _____ | $24,000 | _____ | $32,000 | _____ |
2 | 10,000 | 10,000 | _____ | 29,000 | _____ | 40,000 | _____ |
3 | 12,000 | 10,000 | _____ | 33,600 | _____ | 48,000 | _____ |
4 | 14,000 | 10,000 | _____ | 36,400 | _____ | 56,000 | _____ |
5 | 16,000 | 10,000 | _____ | 38,400 | _____ | 64,000 | _____ |
6 | 18,000 | 10,000 | _____ | 39,600 | _____ | 72,000 | _____ |
Required:
Calculate the cost per unit, and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs.
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