Cost behavior analysis focuses on
A) how costs react to increases in activity levels only.
B) how costs will change in the future.
C) how costs react to changes in activity level.
D) None of these are correct.

Question

Quizplus · Accepted Answer

Cost behavior analysis is the study of how costs react to changes in activity level. It helps organizations understand how their costs will change as they increase or decrease production or sales. Cost behavior analysis is helpful for budgeting, pricing decisions, and performance evaluation.

Cost Behavior Analysis Focuses on