Stepped Fixed Costs
Response to the following problem:
The company pays $3,000 per month to each of its four production supervisors. Each supervisor can handle the workload associated with up to 2,400 units of production per month; the current level of production is 9,000 units.
If the company increases its level of production to 12,800 units per month, how much will the company pay, in total, for the salaries of the necessary production supervisors?