A-2 Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materialsand rent for a range of output as shown below.Diagram cost behavior, determine relevant range, and classify costs.Output in UnitsRent ExpenseDirect Materials1,000$ 5,0002,0003,0004,0005,0006,0007,0008,0009,0005,0007,2008,000 9,0008,000 12,0008,000 15,0008,000 18,0008,000 21,0008,000 24,00010,000 29,30010,000 35,00010,00044,000$ 4,00010,00011,000Instructionsa. Diagram the behavior of each cost for output ranging from 1,000b. Determine the relevant range of activity for this product.c. Calculate the variable costs per unit within the relevant range.11,000 units.?

Let me state the given data, Output in unitsRent expenseDirect…

Answered: a. Diagram the behavior of each cost…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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a. Diagram the behavior of each cost for output ranging from 1,000 to 11,000 units. b. Determine the relevant range of activity for this product. c. Calculate the variable costs per unit within the relevant range.