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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Cost classification
Question: The following statements are about the gradient of a straight line:
1) The gradient of a straight line is where the line crosses the y-axis.
2) On a graph which shows a semi-variable cost the variable cost per unit can be determined using the gradient of a line.
Are the statements true or false?
In the above question, is the statement number 2 false and why is it so. I
think the statement number 2 is false because the gradient of the line will be composed of both fixed and variable elements. I mean besides showing fixed costs at quantity zero, there is another part to fixed costs which is built into the gradient of the line and that’s how the graph shows semi-variable cost. Further, the straight line graph will cross the y-axis at 0 quantity, so at a quantity of zero the gradient of the should probably be where the line crosses the y-axis, otherwise, at 0 quantity what would the gradient be or there is no gradient when the value of x axis is zero.
I do not know where you found this question, but assuming that you have copied it correctly then statement 2 is correct.
The gradient is the angle of the line, and the angle of the line depends on the variable cost per unit.