The intercept of the flexible budget-line is total:
A) sales.
B) variable costs.
C) fixed costs.
D) contribution margin.

Question

Quizplus · Accepted Answer

The intercept of the flexible budget-line represents the fixed costs. This is because the flexible budget-line is based on the assumption that variable costs will increase or decrease as sales volume changes, but fixed costs will remain constant. Therefore, the intercept of the flexible budget-line represents the fixed costs that must be incurred regardless of sales volume.

The Intercept of the Flexible Budget-Line Is Total