Linear-cost behaviour
A) is linear over the entire range of production.
B) cannot be graphed as a straight line.
C) exists when a cost changes proportionately with changes in a cost driver.
D) can be used to graph a step cost.

Question

Quizplus · Accepted Answer

Linear-cost behaviour exists when a cost changes proportionately with changes in a cost driver, meaning the cost increases or decreases in a straight, linear fashion. It is different from step cost, which has a fixed cost over a certain range of production before jumping or "stepping up" to a higher cost for the next range of production. Linear-cost behaviour can be graphed as a straight line.

Linear-Cost Behaviour