Learning Objective $18-$C$1$: Describe different types of cost behavior in relation to production and sales volume.

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Cost behavior is described in terms of how its amount changes in relation to changes in volume of activity within a relevant range. Fixed costs do not change when the volume of activity changes $($within a relevant range$).$ Variable costs change in proportion to changes in volume of activity. Mixed costs include both fixed and variable components. Step$-$wise costs have a step pattern in costs and are fixed within a relevant range. If production volume greatly increases there is an increase in total costs by a lump sum.