The correct answer is A. level of activity.
An independent variable is a variable that is changed by the experimenter in order to observe its effect on another variable, called the dependent variable. In the case of cost estimation, the independent variable is the level of activity, which is the amount of work that is done. The dependent variable is the cost, which is the amount of money that is spent on doing the work.
B. quantity stored is not an independent variable because it is not changed by the experimenter. The quantity stored is determined by the amount of work that is done and the amount of space that is available.
C. quantity manufactured is not an independent variable because it is not changed by the experimenter. The quantity manufactured is determined by the amount of work that is done and the demand for the product.
D. quality of product is not an independent variable because it is not changed by the experimenter. The quality of product is determined by the materials that are used, the manufacturing process, and the quality control procedures.