Question

A cost with a flat cost line within a relevant range that shifts to another level when volume significantly changes is a(n): incremental cost. curvilinear cost. flat line cost. step-wise cost. fixed cost.

Answer 1

Answer:

step-wise fixed cost

Explanation:

A step cost is a cost that remain the same with a range of activities but has the tendency to rise significantly when activity exceeds the normal range.

For example, For a school that pays $10,000  as rent for a classroom of 20-seater capacity, the rent would be fixed as long as the  number of students is within 1 to 20, when the number of students exceed 20, then the school owner will need to get a bigger classroom and that  will cost more.

So the rent becomes an example of  stepped-fixed cost