If the cost of an activity increases with the quantity of items purchased, it is which of the following?
A) market-sustaining cost
B) output unit-level cost
C) batch-level cost
D) product-sustaining (service-sustaining) costs
E) facility-sustaining cost

Question

Quizplus · Accepted Answer

Output unit-level costs increase as the number of units produced increases. If the cost of an activity is directly proportional to the quantity of items produced, it is an output unit-level cost. Market-sustaining costs are expenses incurred to sustain a market position, product-sustaining costs are expenses related to the production of a specific product, facility-sustaining costs are expenses related to maintaining a facility, and batch-level costs are incurred each time a batch of products is made or purchased.

If the Cost of an Activity Increases with the Quantity