In a cost-volume-profit chart, the
A) total cost line begins at zero
B) slope of the total cost line is dependent on the fixed cost per unit
C) total cost line begins at the total fixed cost value on the vertical axis
D) total cost line normally ends at the highest sales value

Question

Quizplus · Accepted Answer

The total cost line in a cost-volume-profit chart begins at the total fixed cost value on the vertical axis, as fixed costs do not vary with changes in sales volume. Option A is incorrect as total cost is not always zero at the beginning, and option B is incorrect as the slope of the total cost line depends on the variable cost per unit. Option D is also incorrect, as the total cost line does not necessarily end at the highest sales value.

In a Cost-Volume-Profit Chart, the