A step cost is a cost that does not have steady changes. While many costs have changes that result in activity volume, a step cost does not.

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Step 1: Examine where your money is going Step 2: Assess your resources Step 3: Assess your costs

Step 6--Use the Economic Analysis for Decision Making

Costing is important to ensure that all expenses are covered and the group fixes a price that ensures a profit. The first and most important step is to identify ALL the costs of a business: production, sales, administrative, overheads, etc. The next step is to classify costs into fixed and variable costs