In a graph of cost-volume-profit analysis,the
A)total revenue line typically begins at a required minimum level.
B)slope of the total cost line is dependent on the variable cost per unit.
C)total cost line normally begins at zero.
D)sales level at which total cost and total revenue lines intersect is also equal to fixed costs.

Question

Quizplus · Accepted Answer

The slope of the total cost line in a cost-volume-profit (CVP) analysis graph is determined by the variable cost per unit. This is because as production or sales volume increases, total costs increase at a rate proportional to the variable cost per unit. Fixed costs do not affect the slope since they remain constant regardless of the volume of units produced or sold.

In a Graph of Cost-Volume-Profit Analysis,the