Each of Boggart's production managers (annual salary cost, $45,000) can oversee 60,000 machine hours of manufacturing activity. Thus, if the company has 50,000 hours of manufacturing activity, one manager is needed; for 75,000 hours, two managers are needed; for 125,000 hours, three managers are needed; and so forth. Boggart's salary cost can best be described as a:
A. fixed cost.
B. variable cost.
C. step-variable cost.
D. step-fixed cost.
E. semivariable cost.
Answer: D
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