Final answer:
The cost of factory landscaping is a common fixed expense (option b), which does not change with the level of production and typically benefits more than one department or product. 'Spreading the overhead' refers to allocating fixed costs over the output, thereby decreasing the average fixed cost per unit with increasing production.
Step-by-step explanation:
The cost of factory landscaping is an example of a common fixed expense. In the realm of cost accounting, fixed costs are expenses that do not fluctuate with changes in production level or sales volume. They are associated with the basic operating activities of a business that are necessary regardless of the scale of production or sales. Examples of fixed costs include rent on a factory, salaries of permanent staff, and landscaping of the factory premises. These costs are termed 'common' because they are not directly attributed to the production of a specific product or service and often benefit more than one department or product line.
Spreading the overhead is another term linked with fixed costs. It refers to the practice of allocating the total fixed costs over the number of units produced or sold. This calculation involves taking the total fixed cost and dividing it by the quantity of output to derive the average fixed cost per unit. As production increases, the average fixed cost per unit decreases, depicting a downward slope when plotted as the average fixed cost curve.