A steep slope in the variable cost line indicates a
A) low variable cost per unit.
B) high influence of activity on total variable costs.
C) low influence of activity on total variable costs.
D) 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 increases, the total variable costs also increase at a faster rate. This is because the cost per unit of activity is relatively constant, but the total number of units increases with the level of activity, thus resulting in a higher total cost.

A Steep Slope in the Variable Cost Line Indicates a