Each of Davisson's production managers (annual salary cost, $45,000) can oversee 60,000 machine hours of manufacturing activity. Thus, if the company has 50,000 hours of manufacturing activity, one manager is needed; for 75,000 hours, two managers are needed; for 125,000 hours, three managers are needed; and so forth. Davisson's salary cost can best be described as a:
A) variable cost.
B) semivariable cost.
C) step-variable cost.
D) fixed cost.
E) step-fixed cost.

Question

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The Answer of Each of Davisson's production managers (annual salary cost, $45,000) can oversee 60,000 machine hours of manufacturing activity. Thus, if the company has 50,000 hours of manufacturing activity, one manager is needed; for 75,000 hours, two managers are needed; for 125,000 hours, three managers are needed; and so forth. Davisson's salary cost can best be described as a:
A) variable cost.
B) semivariable cost.
C) step-variable cost.
D) fixed cost.
E) step-fixed cost.

Each of Davisson's Production Managers (Annual Salary Cost, $45,000) Can