The formula for a fixed cost is:
A)Y = m(X)+ b where m is equal to 0.
B)Y = m(X)+ b where m is equal to 1.
C)Y = m(X)+ b
D)Y = m(X)+ b(X)

Question

Quizplus · Accepted Answer

Fixed costs do not change with the level of production or sales, so in the formula Y = m(X) + b, where Y represents total costs, X represents the level of production or sales, m represents the variable cost per unit, and b represents the fixed costs, m must be equal to 0 to indicate that there are no costs varying with production levels.

The Formula for a Fixed Cost Is