ACCA MA · Chapter 3 · Question 4 of 10
A factory needs one supervisor for every 12 production workers. As the workforce grows, how would supervisor salaries be classified?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Stepped fixed cost
Explanation
Supervisor costs stay fixed across a range of activity (up to 12 workers) and then jump to a new level when another supervisor is needed. This gives a 'staircase' pattern, so it is a stepped fixed cost.
More Cost classification and cost behaviour MCQs
- Q6Fixed costs increase by $10,000 when activity goes above 6,000 units. Total costs were $38,000 at 3,000 units and $90,000 at 9,000 units…
- Q7As the level of activity increases within the relevant range, what happens to fixed cost per unit?
- Q8Which of the following would be the most appropriate cost unit for a hotel?
- Q9In a manufacturing company, how should the salary of the factory canteen manager be classified?
- Q10Under absorption costing, which of the following costs would be included in the value of finished goods inventory?