Step Fixed Cost 2 / How to segregate fixed and variable costs?
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How to segregate fixed and
How to segregate fixed and variable costs?
Based on the high low method
A step fixed cost is a cost that does not change within a certain activity level, but which will change when these levels are breached.
Examples of step fixed costs include:
1.The cost of a new production facility, which includes depreciation on the equipment and the salaries of the production line supervisors.
2.The cost of rolling out a new sales division, which may include the cost of establishing a new warehouse, new staff etc...
Based on the high low method
A step fixed cost is a cost that does not change within a certain activity level, but which will change when these levels are breached.
Examples of step fixed costs include:
1.The cost of a new production facility, which includes depreciation on the equipment and the salaries of the production line supervisors.
2.The cost of rolling out a new sales division, which may include the cost of establishing a new warehouse, new staff etc...
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