Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect on it of the level of production. Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost. Mixed Cost: Mixed cost is the cost, the one proportion of which is fixed and another proportion is variable. Step-Wise Cost: It is the cost which is fixed to some extend and after that point it changes but it doesn’t change with the change in production. Curvilinear Cost: It is the cost which is nonlinear cost which increases at different rates. It is inconsistent to the change in production. Total Cost: Sum total of expenses incurred by the business to earn revenue from sales are known as total cost. To identify: The appropriate term for the given definitions.

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Chapter 5, Problem 2E

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect on it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Mixed Cost:

Mixed cost is the cost, the one proportion of which is fixed and another proportion is variable.

Step-Wise Cost:

It is the cost which is fixed to some extend and after that point it changes but it doesn’t change with the change in production.

Curvilinear Cost:

It is the cost which is nonlinear cost which increases at different rates. It is inconsistent to the change in production.

Total Cost:

Sum total of expenses incurred by the business to earn revenue from sales are known as total cost.

To identify: The appropriate term for the given definitions.

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