Which of the following is true about step costs:
Which of the following is true about step costs:
They are variable within narrowly defined ranges of activity but differ outside those ranges of activity
They increase with each additional unit produced
They have no relation to the number of units produced
They are constant within certain ranges of activity but differ outside those ranges of activity
Homework Answers
Option D is correct. Step Costs are constant within certain ranges of activity but differ outside those ranges of activity.
Explanation:
Step costs are expenses that are
constant for a given level of activity, but increase or decrease
once a threshold is crossed.Step costs, also called
stair-step costs, are costs that do not change in direct proportion
to increasing levels of activity.
ANSWER :
Option : 4th
Step costs remain constant within a certain range and increase or decrease when limits of that range are reached.
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