Which of the Following Is Characteristic of Step Costs

question 35

Multiple Choice

Which of the following is characteristic of step costs?

• A) remain the same within the relevant range
• B) increase in direct proportion to increases in output
• C) decrease in direct proportion to increases in output
• D) have an increased fixed component at specified intervals

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Definitions:

Merchandise

Goods bought and sold by a business in the ordinary course of its trading activity.

Credit

An accounting entry that increases liabilities or equity or decreases assets, or an arrangement to receive cash, goods, or services now and pay for them in the future.

Credit Sales

Transactions where goods or services are sold to a customer with an agreement to pay at a later date.

Cash Collection

The process of receiving and processing payments from customers.