The cost function, in which the graph of total cost would not result in straight line is classified as _______?
Correct answer: A. nonlinear cost function
- A. nonlinear cost function
- B. linear cost function
- C. linear price function
- D. nonlinear price function
Explanation
A nonlinear cost function does not maintain a constant rate of change, so its total-cost graph is not a straight line. A linear cost function produces a straight-line relationship within the relevant range.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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