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28 October, 17:55

Which of the following cost behaviors cannot be accurately represented by a single straight line? A. Fixed costs B. Step costs C. Variable costs D. Mixed costs

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  1. 28 October, 18:46
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    Answer: B. Step costs

    Explanation: Step costs cannot be accurately represented by a single straight line. This is because of its unusual step-like manner-horizontally over a range, then vertically, then horizontally, and so on. Step costs are expenses that change disproportionately when production levels or activity levels of any firm, increases or decreases-they are constant for a given level of activity, but increase or decrease once a threshold is crossed.

    Step costing is very important when a company is about to achieve a new and higher activity level or if activity is falling off and operations must be reduced.
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