Interdiction to cost behavior and cost volume relations

a. Rent on a warehouse that is large enough for all anticipated orders. b. Teachers for a private elementary school; one teacher is needed for every 15 students. c. Sheet steel for a producer of machine parts; steel is purchased in carload shipments, where each carload contains enough steel for 1,000 parts. ec Requirement CO 1. Which are step costs? Why? Begin by selecting whether the example is or is not a step cost, then choose the appropriate explanation as to why it is or why it is not a step cost. nis Step cost Explanation a. Rent on a warehouse that is large enough for all No The same cost applies to all volumes in the relevant range. bo anticipated orders. b. Teachers for a private elementary school; one Yes A cost that changes abruptly at different levels of activity. (b teacher is needed for every 15 students. (b c. Sheet steel for a producer of machine parts; steel No A cost that may be different per unit at different levels of volume. (sit is purchased in carload shipments, where each (sil carload contains enough steel for 1,000 parts. 5(sil