Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 16

How are step costs treated in CVP analysis?

Step 1 of 2

Step cost

Step Costs are costs which are neither fixed nor variable. These are costs that change their nature abruptly with varying levels of operation within the company. They do not vary with the activity constantly but changes at discrete levels. Step costs are fixed within a range and changes at certain points.