Step costs:
A) Are constant within certain ranges of activity but differ outside those ranges of activity
B) Are variable within narrowly defined ranges of activity, but constant over wider ranges of activity
C) Increase with each additional unit produced
D) Have no relation to number of units produced

Question

Quizplus · Accepted Answer

Step costs behave as fixed costs within a relatively narrow range, but increase to a higher level when that range is exceeded. A typical example of step costs is an inspection cost where each inspector can handle a fixed volume of product.

Step Costs