Cost behaviour is:
A) another word for cost object.
B) irrelevant for service organisations.
C) the variation in costs relative to the variation in activities.
D) an old fashioned term for activity cost analysis.

Question

Quizplus · Accepted Answer

Cost behavior refers to how a cost will react or change as the level of business activity changes. It is not synonymous with a cost object (which is anything for which a separate measurement of costs is desired), irrelevant to service organizations (as understanding cost behavior is crucial for them too), nor an old-fashioned term for activity cost analysis (which is a method for analyzing cost behavior by activity).

Cost Behaviour Is