How Are Fixed Costs Represented Graphically

question 62

Multiple Choice

How are fixed costs represented graphically?

• A)a horizontal line, staying the same irrespective of the level of activity.
• B)starting at zero and increasing as a straight line as activity increases.
• C)starting at a given point and increasing as a straight line as activity increases.
• D)the intersection of the total costs and total revenue lines.

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Definitions:

Amortize

The process of spreading out a loan or an intangible asset cost over a specific period of time for accounting and tax purposes.

Accumulated Depreciation

The total depreciation that has been applied to a fixed asset since it was acquired, representing the loss of value over time.

Balance Sheet

A financial record showing the balance of assets, liabilities, and equity of shareholders of an enterprise on a specific date.

Fair Market Value

The price that a property would sell for on the open market, between a willing buyer and a willing seller.