A company rents warehouses for storage.Each warehouse is capable of storing up to 400 units,and costs £500 per month.For 250 units,the cost would be £500.For 500 units,the cost would be £1,000.
This is an example of:

Question

Quizplus · Accepted Answer

Fixed costs remain unchanged regardless of activity.Variable costs vary directly in line with output; cost per unit is unchanged.Semi-Variable costs have a fixed element and a cost per unit.Stepped costs, like in the example above, behave like fixed costs up to a certain level, and then jump up.Car park charges are an example of a stepped cost you may encounter in day to day life.

A Company Rents Warehouses for Storage