Question

A company spends a considerable amount on publicity to promote sales. This expenditure in a break-even chart is shown below the:

• A. Fixed cost line
• B. Variable cost line
• C. Total cost line
• D. Sales revenue line

Hint:

Classify costs correctly to create accurate break-even charts.

Answer 1

The Correct Option is B

Publicity costs vary with sales activity and are therefore considered variable costs. They are plotted below the variable cost line in a break-even chart.