ACCT 1B Lecture Notes - Lecture 8: Variable Cost

• School: Irvine Valley College
• Department: Accounting
• Course: ACCT 1B
• Professor: johnson

Document Summary

Step-variable costs: costs that are nearly variable, but they increase in small steps instead of continuously. Usually include inputs that are purchased and used in relatively small increments. If the steps in a step-variable cost behavior pattern are small, the step- variable cost function may be approximated by a variable cost function without much loss in accuracy. Step-fixed costs: costs that remain fixed over a wide range of activity but jump to a different amount for activity levels outside that range. Fixed over some range, what a majority of fixed costs are. Semi-variable (or mixed) costs: costs that have both a fixed and variable. The distance between the fixed-cost line and the total-cost line is the component. amount of variable cost. The slope of the total-cost line is the variable cost per unit of activity. Curvilinear cost: this behavior pattern has a curved graph. For low levels of activity, this cost exhibits decreasing marginal costs.