The correct answer is: D. homogeneous relationship
A homogeneous relationship is a relationship in which the dependent variable is a linear function of the independent variable. In other words, the dependent variable changes in a consistent way as the independent variable changes.
In the case of the question, the dependent variable is the activity cost, and the independent variable is the cost driver. The cost driver is a factor that causes the activity cost to change. For example, the number of units produced is a cost driver for the cost of production.
If the activity cost is included in the dependent variable, then the relationship between the activity cost and the cost driver is a homogeneous relationship. This is because the activity cost will change in a consistent way as the cost driver changes.
The other options are incorrect because they do not describe a homogeneous relationship.
- A heterogeneous relationship is a relationship in which the dependent variable is not a linear function of the independent variable. In other words, the dependent variable changes in an inconsistent way as the independent variable changes.
- An extreme relationship is a relationship in which the dependent variable changes very quickly as the independent variable changes.
- No homogeneous relationship is a relationship in which the dependent variable does not change as the independent variable changes.