The correct answer is D. all of the above.
A cause-and-effect relationship between activity and costs is the result of contractual agreement, knowledge of operations, and measurable unit relationship.
A contractual agreement is a legally binding document that outlines the terms and conditions of a business relationship. It can include information such as the scope of work, the timeline, the payment terms, and the penalties for non-compliance. A contractual agreement can help to ensure that both parties understand their obligations and that the project is completed on time and within budget.
Knowledge of operations is essential for understanding the cause-and-effect relationship between activity and costs. This knowledge includes understanding the processes involved in producing a product or service, the resources that are required, and the costs associated with each resource. Knowledge of operations can help to identify opportunities for cost savings and to improve efficiency.
A measurable unit relationship is a way of measuring the output of an activity. This can be done in terms of units produced, time taken, or resources used. A measurable unit relationship can help to track costs and to identify areas where costs are increasing.
Together, these three factors can help to establish a cause-and-effect relationship between activity and costs. This information can be used to improve efficiency, to identify cost savings, and to make better decisions about how to allocate resources.