The equation for a straight line is y = fx + v, where y is the total cost, f is the fixed cost per unit, x is the volume of activity, and v is the variable cost per unit.

Question

Quizplus · Accepted Answer

The equation y = fx + v represents the total cost as a linear function of volume of activity x. However, the fixed cost per unit should not be represented as f, but rather as a constant term, such as a. The correct equation for a straight line would be y = ax + v.

The Equation for a Straight Line Is Y = Fx