The following cost graphs illustrate various types of cost behavior. For each of the following costs, identify the cost graph that best illustrates its behavior as the number of units produced Total direct materials cost per kilowatt-hour Electricity costs of $1,000 per month plus $0.10 equipment Per unit cost of straight-line depreciation on factory Salary of quality control supervisor, $20,000 per month Per unit direct labor cost
Cost behavior is an indicator of how a cost will change in total when there is a change in some activity. In cost accounting and managerial accounting, three types of cost behavior are usually discussed:
Variable Cost: The total amount of a variable cost increases in proportion to the increase in an activity. The total amount of a variable cost will also decrease in proportion to the decrease in an activity.
You are watching: The following cost graphs illustrate various types of cost behavior:
Fixed Cost: The total amount of a fixed cost will not change when an activity increases or decreases.
Mixed or semivariable costs. These costs are partially fixed and partially variable
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