Which of the following statements about step costs is FALSE?
A)If the individual chunks of cost are relatively large and apply to a specific,broad range of activity,the step cost is considered to be a fixed cost over that range of activity.
B)When individual chunks of cost are relatively small and apply to a narrow range of activity,step costs are considered to be variable costs.
C)Some step costs can be assumed to be variable costs for planning purposes with little loss of accuracy.
D)Step costs are the same as mixed costs.

Question

Quizplus · Accepted Answer

Step costs are not the same as mixed costs. Mixed costs have both a fixed and variable component, whereas step costs are only fixed over a certain range of activity and then increase when that range is exceeded.

Which of the Following Statements About Step Costs Is FALSE