Which of the following statements is TRUE?
A)The slope of the total cost line is dependent on the variable cost per unit.
B)The total cost line normally begins at zero.
C)The total revenue line typically begins above zero.
D)The slope of the total revenue line is the contribution margin per unit.

Question

Quizplus · Accepted Answer

The slope of the total cost line is indeed dependent on the variable cost per unit because the total cost includes both fixed costs (which do not change with the level of production) and variable costs (which do change with the level of production). The variable cost per unit directly affects how steeply the total cost line rises as production increases.

Which of the Following Statements Is TRUE