Step costs are fixed over only a small range of activity.Once that level of activity has been exceeded,total cost
A)Increases because the excess costs become variable.
B)Increases and remains constant over another small range of activity.
C)Remains the same regardless of activity.
D)None of these ans choices is correct.

Question

Quizplus · Accepted Answer

Once the level of activity exceeds the small range in which step costs are fixed, total cost increases and remains constant over another small range of activity. This is because the step cost remains fixed within this new range, but once the level of activity exceeds this range, another step cost may be incurred, causing total cost to increase again.

Step Costs Are Fixed Over Only a Small Range of Activity.Once