If costs are purely fixed in determining the cost line equation,
A) regression analysis must be used.
B) the equation of the line becomes Y = m(X).
C) the equation of the line becomes Y = b.
D) the equation of the line remains Y= m(X) + b.

Question

Quizplus · Accepted Answer

If costs are purely fixed, the cost does not change with the level of activity, so the equation of the line is Y = b, where b is the fixed cost.

If Costs Are Purely Fixed in Determining the Cost Line