Which of the following statements is most correct about step-variable costs
A)The step-variable costs vary in direct proportion to changes in the level of activity.
B)The step-variable costs remain constant through the same relevant range of activity as related fixed costs.
C)The step-variable costs are excluded from consideration in budgeting.
D)Between certain levels of activity, the step-variable costs have the same behaviour as fixed costs.

Question

Quizplus · Accepted Answer

Step-variable costs have a fixed cost for a certain level of volume and then jump to another fixed cost for the next level. Between these levels, the step-variable costs have the same behavior as fixed costs. Therefore, option D is the correct answer. Options A and B are incorrect as these descriptions apply to variable and fixed costs, respectively. Option C is also incorrect as step-variable costs are an important consideration in budgeting decisions.

Which of the Following Statements Is Most Correct About Step-Variable