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okinawagirls
Aug 22, 2013, 06:15 PM
Explain the relationship between step-fixed costs and relevant range

jaden smith
Sep 10, 2013, 05:42 AM
A cost that is fixed over a certain range is step fixed cost, once it exceeds the range it is again get fixed to that certain range ( generally referred as relevant range).
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Consider you have stockroom of monthly rent of $300 which has the capacity of storing 100 wheat bags. Here $300 is the step fixed cost and 100 bags is the relevant range. When you are in need to store another 10bags of wheat, you need to get your hands on another stockroom on rent. Thereby the step fixed cost is increased and fixed at $600 for relevant range of 200 bags