Cost behavior analysis is a study of how a firm’s costs


Cost behavior analysis is a study of how a firms costs a) relate to competitors costs. b) respond to changes in the gross national product. O d) respond to changes in the level of business activity. d) relate to general price level changes. nse Save Question 5 (2 points) ted If the activity level increases 10%, total variable costs will Ei en

Answer

1
Cost Behavior Analysisis the study of how specific costs respond to changes in the level of business activity.
Ans: Option C
Explanation
Variable costs are costs that vary in total directly and proportionately with changes in the activity level. Variable costs remain the same per unit at every level of activity.
Fixed costs are costs that remain the same in total regardless of changes in the activity level.
Mixed costsare costs that contain both a variable element and a fixed element. Mixed costs, therefore, change in total but not proportionately with changes in the activity level.

Leave a Comment