At Zero Direct Labor Hours in a Flexible Budget Graph

question 93

Multiple Choice

At zero direct labor hours in a flexible budget graph the total budgeted cost line intersects the vertical axis at $30000. At 15000 direct labor hours a horizontal line drawn from the total budgeted cost line intersects the vertical axis at $90000. Fixed and variable costs may be expressed as:

• A) $30000 fixed plus $4 per direct labor hour variable.
• B) $30000 fixed plus $6 per direct labor hour variable.
• C) $60000 fixed plus $2 per direct labor hour variable.
• D) $60000 fixed plus $4 per direct labor hour variable.

---

Definitions:

Consumption Function

A macroeconomic concept that describes the relationship between total consumption and gross national income.

Consumption Function

An economic formula that represents the relationship between total consumer spending and total national income.

Household Wealth

The total value of all financial and non-financial assets owned by members of a household minus any liabilities.

Consumption Function

An economic formula that expresses the relationship between total consumption and gross national income.