Costs that remain the same over a wide range of activity, but jump to a different amount outside that range, are known as:
A) step-fixed costs.
B) step-variable costs.
C) semivariable costs.
D) curvilinear costs.
E) mixed costs.

Question

Quizplus · Accepted Answer

Step-fixed costs remain constant over a wide range of activity but will change to a different fixed amount when activity moves outside that range. This is characteristic of costs that are fixed for a certain level of production or activity, but once that level is exceeded, additional resources or capacity may need to be added, causing the costs to jump to a new fixed level.

Costs That Remain the Same Over a Wide Range of Activity