Step Costs Are Fixed Over Only a Small Range of Activity.Once

question 133

Multiple Choice

Step costs are fixed over only a small range of activity.Once that level of activity has been exceeded, total cost

• A)increases because the excess costs become variable.
• B)increases and remains constant over another small range of activity.
• C)remains the same regardless of activity.
• D)decreases and remains constant over another small range of activity.

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Definitions:

Additional Investment

Funds injected into a business by its owners or shareholders over and above the initial investment, typically to support operations, expansion, or growth.

Revenue Recognition

An accounting principle that outlines the specific conditions under which revenue is recognized and dictates how it should be reported in the accounts.

Production Process

The sequence of operations or procedures used to create finished goods from raw materials, typically involving planning, sourcing, manufacturing, and quality control.

Services Rendered

Work or duties provided by one party to another, often resulting in payment for the work done.