If a Cost's Step-Cost Behavior Follows Very Narrow Steps, the Costs

question 45

Multiple Choice

If a cost's step-cost behavior follows very narrow steps, the costs may be approximated using:

• A) straight variable cost assumptions.
• B) fixed costs assumptions.
• C) step-fixed cost assumptions.
• D) mixed cost assumptions.

---

Definitions:

Fixed Monthly Expenses

Regular expenses that do not vary in amount and occur every month, such as rent or mortgage payments.

Net Operating Income

A company's operating profit after subtracting operating expenses from revenue, excluding non-operating activities like taxes and interest.

Break-even Point

The financial analysis point at which total revenues equal total costs, resulting in no profit or loss.

Target Profit

The anticipated profit a business aims to achieve within a specific period, guiding pricing and production decisions.