Which of the following statements regarding a linear cost function is TRUE?
A) When there are only fixed costs, total material costs increase as the number of units produced increases.
B) The slope coefficient of a mixed cost line intersects the vertical axis at zero.
C) The relationship between the cost driver and the fixed cost is represented by the cost-benefit relationship.
D) It is easier to identify a single measure of benefit in a more heterogeneous cost pool.
E) A linear cost function for manufacturing overhead can be graphed when their is a cause-and-effect relationship between the level of activity and the costs related to that level of activity.
Correct Answer:
Verified
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