Answer: D

Explanation:

1. Reason for Selection:
   • The cost is termed a Stepped Fixed Cost because the cost increases in a step-like manner as the production hours exceed specific thresholds.
2. Cost Behavior Analysis:
   • At less than 320 hours, the company incurs a fixed cost of N40,000 for one manager.
   • Between 320-640 hours, two managers are required, doubling the cost to N80,000, thus it jumps or “steps” up when the production hours increase beyond a certain point, but it remains fixed within those production brackets.
3. Understanding the Behavior:
   • Stepped fixed costs remain constant within a certain range of activity but jump to a higher level once that range is exceeded, which perfectly describes the scenario given.