Cost Behavior Analysis (20 marks)
a. Define and differentiate between fixed costs, variable costs, semi-variable costs, and step costs. Provide real-world examples for each category.
b. A manufacturing company produces 10,000 units of a product, incurring total costs of $50,000, of which $20,000 are fixed costs. If the company increases production to 12,000 units and total costs increase to $55,000, analyze the cost behavior and calculate the variable and semi-variable costs.