The examples of nonlinear cost functions are _____________?
Correct answer: B. step cost functions
- A. step constant functions
- B. step cost functions
- C. step price functions
- D. step object functions
Explanation
Step cost functions are nonlinear because cost remains constant over an activity interval and then jumps to a new level when capacity is exceeded. This stepped pattern differs from a straight-line variable cost relationship.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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