Step cost function
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Step cost function is cost function in which the cost remains the same over various ranges of the level of activity, but the cost increases by discrete amounts (that is, increases in steps) as the level of activity changes from one range to the next.
Definitions
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Step cost function. A cost function in which the cost remains the same over various ranges of the level of activity, but the cost increases by discrete amounts (that is, increases in steps) as the level of activity changes from one range to the next.
