CAF-5 · Chapter 13 · Question 5 of 10
On a conventional Break-Even Chart, how is the "Total Fixed Costs" line typically drawn?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) As a horizontal line parallel to the x-axis, starting at the level of total fixed costs on the y-axis.
Explanation
On a break-even chart, fixed costs remain constant regardless of the volume. Therefore, the line is drawn horizontally parallel to the activity (x) axis, starting from the total fixed cost value on the y-axis.
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