What does a steep slope in the variable cost line indicate?
A)a low variable cost per unit
B)a high influence of activity on total variable costs
C)a low influence of activity on total variable costs
D)a large amount of fixed costs

Question

Quizplus · Accepted Answer

A steep slope in the variable cost line indicates that there is a high influence of activity on total variable costs. This means that as the level of activity (such as production or sales) increases, the total variable costs increase at a higher rate. This is because each unit produced or sold incurs a relatively high variable cost.

What Does a Steep Slope in the Variable Cost Line