Step Costs
The distributor charges $10 per bike for shipping for 1 to 10 bikes but $8 per bike for 11 to 20 bikes. If Bert wants to save money and control his cost of goods sold, he can order an 11th bike and drop his shipping cost by $2 per bike. It is important for Bert […]
What does stepped cost mean?
True valuable costs are those variable costs that have a direct and one to one relationship with output levels of a business. In other words, these costs are directly proportionate to output and change with every change in output level. So, if for every single unit increase in output, a particular cost element also increases […]