The correct answer is C. economic batch quantity.
Batch costing is a method of accounting that assigns costs to batches of products or services. It is useful for determining the economic batch quantity, which is the quantity of a product or service that should be produced in each batch in order to minimize costs.
The economic batch quantity is determined by considering the following factors:
- The setup cost of producing a batch.
- The variable cost of producing a unit of product.
- The holding cost of storing a unit of product.
The economic batch quantity is the quantity that minimizes the total cost of production, which is the sum of the setup cost, the variable cost, and the holding cost.
A is incorrect because the maximum quantity of output is not necessarily the economic batch quantity. The economic batch quantity is the quantity that minimizes costs, not the quantity that maximizes output.
B is incorrect because the minimum quantity of output is not necessarily the economic batch quantity. The economic batch quantity is the quantity that minimizes costs, not the quantity that minimizes output.
D is incorrect because the profit of batches is not necessarily determined by the economic batch quantity. The profit of batches is determined by a number of factors, including the selling price of the product, the variable cost of production, and the fixed costs.