A graph with the amount of some cost driver on the "x" axis and the cost of production on the "y" axis that is a straight line, with an upward slope, starting with $5,000 of costs at zero levels of production, would indicate which type of cost relationship?
A) Fixed responsiveness
B) Proportional responsiveness
C) Semi-variable costs
D) Step costs

Question

Quizplus · Accepted Answer

A straight line with an upward slope indicates a semi-variable cost relationship, where there is a fixed component (represented by the y-intercept of $5,000) and a variable component (represented by the upward slope). This means that the cost increases as the amount of the cost driver increases, but there is still a fixed cost component that remains constant regardless of the level of production.

A Graph with the Amount of Some Cost Driver on the "X