Which Example Is NOT a Step Cost

question 28

Multiple Choice

Which example is NOT a step cost?

• A) When oil and gas exploration activity reaches a certain level in a given area, a company leases an additional rig. The lease cost of the rigs is a step cost.
• B) When ten nurses are added to a shift, a nursing supervisor is also added to the shift. The salaries of the nursing supervisors are a step cost.
• C) When a telemarketing company adds ten workers to a shift, a supervisor is also added to the shift. The salaries of the supervisors are a step cost.
• D) When a manufacturing company ceases production, a skeleton crew of maintenance workers continues to work, but the rest are terminated. When production resumes, maintenance workers are rehired in direct proportion to the amount of production. The wages of the maintenance workers are a step cost.

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Definitions:

Gatekeeper

In information theory, gatekeepers are individuals or policies that control the flow of information and access to resources within an organization.

Logistics

Those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.

Buying Center

A group of individuals within an organization who are responsible for making purchasing decisions, including users, influencers, deciders, approvers, and gatekeepers.

Decider

An individual or group responsible for making the final decision in a purchasing process, often holding the authority to approve significant business transactions.