Costs that change abruptly at different levels of activity because the resources and their costs come in indivisible chunks are called ________.
A)mixed costs
B)variable costs
C)fixed costs
D)step costs

Question

Quizplus · Accepted Answer

Step costs are a type of cost that changes abruptly at different levels of activity because the resources and their costs come in indivisible chunks. These costs are fixed within a certain range of activity but then increase in steps when activity exceeds certain thresholds. For example, the cost of a production supervisor may be a step cost if an additional supervisor must be hired to handle an increase in production beyond a certain level.

Costs That Change Abruptly at Different Levels of Activity Because