Chapter 21, Problem 15DQ

To determine

CVP chart is the graphical representation of CVP analysis. In CVP chart the no. of units produced are plotted on X-axis and cost on Y-axis.

If we plot the fixed cost on Y-axis than a straight horizontal line is drawn because fixed costs remain same in totality at each level of activity.

If we plot the variable cost line on Y-axis then there will be positive upward slop that will rise with the increase in activity level.

In the given question we have to determine that the positive slope line that rises at each additional unit of volume what represents.