In the equation: y = vx + f, what term represents the variable cost per unit of activity? (Assume x represents the volume of activity.)
A) f
B) v
C) y
D) vx

Question

Quizplus · Accepted Answer

In the equation y = vx + f, the term v represents the variable cost per unit of activity. This is because v is multiplied by x, which is the volume of activity, and represents the variable cost that is incurred as the volume of activity increases. The term f, on the other hand, represents the fixed cost component that does not vary with changes in activity volume.

In the Equation: Y = Vx + F, What Term