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Given the Following Four Cost Behaviors and Expected Levels of Cost-

Question 142

Essay

Given the following four cost behaviors and expected levels of cost- driver activity, predict total costs.
a. Fuel costs of driving vehicles, $0.37 per mile, driven 20,000 mile per month
b. Computer rental cost, $500 per piece of equipment per month for three computers for four months
c. Crew supervisors' costs, where a new supervisor is hired for each 10 workers employed; the supervisors are paid $50,000 per year and there were 82 workers employed.
d. Purchasing department cost for 4,000 orders in one month. Its cost function is $8,000 per month plus $7 per material order processed.

Correct Answer:

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a. $0.37 x 20,000 = $7,400 for...

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