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Stepped fixed cost

A stepped fixed cost stays constant within a band of activity, then changes when another resource block is needed. Supervisors, vehicles or rented machines can create this pattern. Forecasting must identify the capacity threshold rather than extending one fixed total across all volumes. Within each step, the cost behaves as fixed; the size and timing of the steps depend on how resources can be acquired or released.

Worked example

One supervisor costing $3,000 monthly is needed for each group of up to 10 workers. Twelve workers require two supervisors, costing $6,000.

Common mistake

Do not treat a stepped cost as smoothly proportional or ignore the extra whole resource required just beyond a threshold.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027