When a mixed cost is graphed the Y-intercept corresponds to the
A) step cost.
B) variable rate.
C) fixed cost.
D) price of the units sold.

Question

Quizplus · Accepted Answer

The Y-intercept of a mixed cost graph represents the fixed cost component. This is the amount of cost that remains constant regardless of the level of activity. The variable rate, or the cost incurred per unit of activity, is represented by the slope of the line. The price of the units sold is not directly related to the mixed cost and is not represented on the graph. Step costs refer to costs that increase in large, discrete amounts at certain levels of activity, and are not typically represented by a straight line graph.

When a Mixed Cost Is Graphed the Y-Intercept Corresponds to the