Assuming Costs Are Represented on the Vertical Axis and Volume

question 57

Multiple Choice

Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that starts at the origin and reaches a maximum value and beyond this point the line becomes parallel to the horizontal axis?

• A) total direct material costs
• B) a consultant paid £100 per hour with a maximum fee of £2,000
• C) employees who are paid £15 per hour and guaranteed a minimum weekly wage of £300
• D) rent on exhibit space at a convention

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