types of costs

Question 1

fixed costs

Answer 1

costs that are CONSTANT; remains the same when sales increase or decrease

Question 2

variable costs

Answer 2

costs that change PROPORTIONATELY; increase with an increase in sales, decrease with a decrease in sales

Question 3

Stepped Costs

Answer 3

costs that change in total in a stair-stepped fashion with changes in volume of activity

Question 4

mixed costs

Answer 4

costs that have both fixed and variable components