Data extracted from the accounting information system of TXC Corporation produced the following graph. The equation of the dashed line is y = $25x; the equation of the solid line is y = $200 + $5x. The solid line intersects the y-axis at the:

Question

Quizplus · Accepted Answer

The solid line represents the total cost (fixed cost + variable cost) and intersects the y-axis, which represents the total cost when the quantity produced is zero. Therefore, the y-intercept represents the total fixed cost (the cost that does not vary with the level of production).

Data Extracted from the Accounting Information System of TXC Corporation