Answer: c. step-variable cost
Explanation:
Step variable costs are variable costs in that they change in relation to the level of activity.
They are different from true variable costs however because they are only incurred at certain points. In other words, they are only incurred when the level of activity reaches a certain point.
In this case, the cost of the shirt is incurred depending on activity so it is a variable cost. It will however only be incurred at certain activity levels which fits the definition of a step-variable cost.
