Relationship between step-fixed costs and the relevant range

malarco31 · #1 Dec 13, 2007, 08:30 AM

I am taking a business course but I have absolutely no idea about anything, so I have many questions that I'm sure I'll be posting. I wanted to know the relationship between step-fixed costs and the relevant range. Does anyone know?

MaggieMouse · Mar 13, 2008, 07:35 AM

Within a relevant range, the cost is usually remains constant. For example, you are buying frozen pizza in a box from the grocery store. One pizza can feed 3 guys. Step-fixed cost is the cost of the pizza, it is sold by the box, there is no partial pizza to be sold. The relevent range is the 3 guys, once it's more than 3, it goes up to the next level->need another box of pizza. When you have 4 guys waiting to eat pizza, you need to buy 2 pizza, not 1.



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