Homework: HW Ch 6 Score: 0 of 1 pt S6-18 (book/static) Following are a series of

Question

Homework: HW Ch 6 Score: 0 of 1 pt S6-18 (book/static) Following are a series of cost behavior graphs. The total cost is shown on the vertical (y) axis and the volume (activity) is shown on the horizontal (x) axis Save 2 of 15 (0 complete) HW Score: 0%, 0 of 15 p Question Help Click the icon to view the graphs) For each of the following situations, identify the graph that most closely represents the cost behavior pattern of the cost in that situation. Some graphs may be used more than once or not at all a. Wood costs for a chair manufacturer, the cost of direct materials per chair is $9.60 Graph 2 6 Graph/Chart 10 12 Print Done Click to

Explanation / Answer

Answer - Graph 2

Direct Material is a Variable Cost. It varies with the changes in output. Variable costs decrease with fall in production level and increases with rise in production level. The graph 2 clearly shows that. As the Volume increases, total cost also increases due to variable costs.

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