Angle of incidence is the angle between:
ASales line and total cost line
BVariable and fixed line
CSales and variable line
DVariable and total line
Answer & Solution
Correct answer: A. Sales line and total cost line
1. On the break-even chart, the angle of incidence is formed at the BEP itself.
2. It lies between the sales line and the total cost line.
3. A wider angle implies a higher P/V ratio and faster profit growth.
4. Hence the answer is between the sales line and the total cost line.
_Source: ICAI BoS Inter Paper 3, Ch 14 "Marginal Costing", §14.5.4 ¶2_
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