Problem 1-17B Identifying Cost Behavior Patterns (LO1-4] A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each graph represents total cost and the horizontal axis represents the level of activity (volume). 2 3 4 A 5 6 7 8 9 10 11 12 Consider the cost behavior patterns of each of the following situations: a. City water bill, which is computed as follows: a. City water bill, which is computed as follows: First 2,000,000 gallons or less Next 15,000 gallons Next 15,000 gallons Next 15,000 gallons Etc. $ 300 flat fee $ 0.004 per gallon used $ 0.008 per gallon used $ 0.012 per gallon used Etc. b. Use of a machine under a lease, where a minimum charge of $2,500 is paid for up to 100 hours of machine time. After 100 hours of machine time, an additional charge of $4 per hour is paid up to a maximum charge of $4,000 per period. C. Cost of raw materials used. d. Rent on a factory building donated by the city, where the agreement calls for a fixed fee payment unless 500,000 labor-hours or more are worked, in which case no rent need be paid. e. Depreciation of equipment, where the amount is computed by the straight-line method. When the depreciation rate was established, it was anticipated that the obsolescence factor would be greater than the wear and tear factor, f. Rent on a factory building donated by the county, where the agreement calls for rent of $350,000 less $1 for each direct labor-hour worked in excess of 100,000 hours, but a minimum rental payment of $50,000 must be paid. g. Salaries of maintenance workers, where one maintenance worker is needed for every 200 hours of machine-hours or less that is, 0 to 200 hours requires one maintenance worker, 201 to 400 hours requires two maintenance workers, etc.). h. Electricity bill -- a flat fixed charge, plus a variable cost after a certain number of kilowatt-hours are used. i. Cost of raw materials, where the cost starts at $10.00 per unit and then decreases by 5 cents per unit for each of the first 100 units purchased, after which it remains constant at $4.00 per unit. Required: 1. For each of the above situations, identify the graph that illustrates the cost behavior pattern involved. Any graph may be used more than once. Situation Graph a. b. c. d. e. 4 f. 9