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Google has both fixed and variable costs. why are fixed costs depicted as a horizontal line...

Google has both fixed and variable costs. why are fixed costs depicted as a horizontal line on a CVP chart?
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Answer #1

Fixed Costs are depiceted as a horizontal line on a CVP chart, because they remain constant they do not change with the change in sales, wherease variable costs change according to the change in sales. Fixed Costs have to be incurred for the period whether or not sales took place or not e.g. Rent of a office has to be paid every month doesn't matter even if the company was closed for the entire month. Therefore fixed costs are depicted by a horizontal line on a CVP chart.

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