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 horizontal, with $5,000 of costs at all levels of production, including zero 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

This graph represents a fixed cost structure, where the total cost does not change with the level of production. The cost remains constant at $5,000 regardless of the amount of production, indicating fixed responsiveness.

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