accounting 552

1.You are on a tight budget and need to decide among the following 3 texting plans:

Plan A: Pay $0.10 per text

Plan B: Pay a fixed monthly fee of $15 for up to 500 texts per month and $0.08 for each text over the 500.

Plan C: Pay a fixed monthly fee of $25 for up to 1,000 texts per month and $0.05 for each text over the 1,000.

Requirements 

a.Draw a graph of the total monthly cost of the three plans for different levels of texting.

b.Which plan should you choose if you expect to make:

i.240 texts per month?

ii.780 texts per month?

iii.1,250 texts per month?

2.In 3–4 sentences, define the following terms and give two examples of each:

a.Direct Materials Cost.

b.Direct Manufacturing-Labor Costs.

c.Manufacturing Overhead Costs.

d.Indirect Materials Costs.

e.Prime Costs.

f.Conversion Costs.