Which of the following is a true statement relating to step costs?
A)Step costs remain constant over only a small range of activity.
B)Step costs do not contain a fixed component.
C)Step costs are also referred to as fixed costs.
D)None of these ans choices is a true statement.

Question

Quizplus · Accepted Answer

Step costs are costs that increase in a stepwise manner as activity increases, rather than increasing proportionally with activity. They remain constant within a certain range of activity, but increase in steps as activity increases beyond that range. So, option A is a true statement. Option B is incorrect because step costs do contain a fixed component. Option C is partially correct because step costs are a type of fixed cost, but not all fixed costs are step costs. Option D is not correct because option A is true.

Which of the Following Is a True Statement Relating to Step