Suppose a cost's step-cost behaviour follows very narrow steps. What assumptions can be used to approximate the costs?
A) fixed cost assumptions
B) mixed cost assumptions
C) variable cost assumptions
D) step-fixed cost assumptions

Question

Quizplus · Accepted Answer

When step-cost behavior follows very narrow steps, it can be approximated as a variable cost because the cost changes with each unit of activity, similar to how variable costs behave.

Suppose a Cost's Step-Cost Behaviour Follows Very Narrow Steps