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Management Accounting MCQs

Which of the following statements regarding graphs of fixed and variable costs is true?

Fixed and Variable costs are curvilinear form above zero on the “Y” axis.

Fixed costs can be represented by a straight line starting at the origin and continuing through each data point.

Fixed costs are zero when production is equal to zero.

Variable costs can be represented by a straight line where costs are the same for each data point.

Variable costs are zero when production is equal to zero.

Answer

Correct Answer: Variable costs are zero when production is equal to zero.

Explanation:

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