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

Question

Quizplus · Accepted Answer

Step costs are costs that remain constant over a range of activity level but abruptly increase or decrease at certain points or levels of activity because resources are only available in indivisible chunks. Mixed costs contain both fixed and variable components, variable costs change proportionally with changes in the activity level, and fixed costs remain constant regardless of changes in the activity level.

Costs That Change Abruptly at Different Levels of Activity Because