Dizzy Amusement Park is open from 8:00 am till midnight every day of the year. Dizzy charges its patrons a daily entrance fee of $30 per person which gives them unlimited access to all of the park's 35 rides.Dizzy gives out a free T-shirt to every 100th customer entering the park. The cost of this T-shirt would best be described as a:
A) fixed cost
B) mixed cost
C) step-variable cost
D) true variable cost

Question

Quizplus · Accepted Answer

The cost of the T-shirt is a step-variable cost because it varies with the number of customers in steps, not directly proportional to the number of customers but increases in steps for every 100th customer.

Dizzy Amusement Park Is Open from 8:00 Am Till Midnight