[amp_mcq option1=”purpose level costs” option2=”output-unit level costs” option3=”input-unit level costs” option4=”activity level costs” correct=”option4″]
The correct answer is: D. activity level costs.
Activity level costs are costs that vary with the number of activities performed. For example, the cost of hiring a new employee is an activity level cost, because it will vary with the number of new employees hired.
Purpose level costs are costs that are incurred for a specific purpose, such as the cost of developing a new product.
Output-unit level costs are costs that vary with the number of units produced, such as the cost of raw materials.
Input-unit level costs are costs that vary with the number of units of input used, such as the cost of labor.