Which example is NOT a step cost? AWhen oil and gas exploration activity reaches a certain level in a given area, a company leases an additional rig. The lease cost of the rig is a step cost. BWhen 10 nurses are added to a shift, a nursing supervisor is also added to the shift. The salaries of the nursing supervisors are a step cost. CWhen a telemarketing company adds ten workers to a shift, a supervisor is also added to the shift. The salaries of the supervisors are a step cost. DWhen a manufacturing company ceases production, a skeleton crew of maintenance workers continues to work, but the rest are terminated. When production resumes, maintenance workers are rehired in direct proportion to the amount of production. The wages of the maintenance workers are a step cost.

Cost are the expenses which are incurred by the company due to fact that certain activities has been…

Answered: Which example is NOT a step cost?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which example is NOT a step cost?

	A	When oil and gas exploration activity reaches a certain level in a given area, a company leases an additional rig. The lease cost of the rig is a step cost.
	B	When 10 nurses are added to a shift, a nursing supervisor is also added to the shift. The salaries of the nursing supervisors are a step cost.
	C	When a telemarketing company adds ten workers to a shift, a supervisor is also added to the shift. The salaries of the supervisors are a step cost.
	D	When a manufacturing company ceases production, a skeleton crew of maintenance workers continues to work, but the rest are terminated. When production resumes, maintenance workers are rehired in direct proportion to the amount of production. The wages of the maintenance workers are a step cost.

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