Knowing how costs behave to change in the level of activity is useful to management for all the following reasons except for:
A) predicting customer demand.
B) predicting profits as sales and production volumes change.
C) estimating costs.
D) changing an existing product production.

Question

Quizplus · Accepted Answer

Predicting customer demand is more directly related to market research and analysis rather than understanding how costs behave with changes in activity levels. The other options (B, C, D) are directly related to understanding cost behavior for financial planning and operational adjustments.

Knowing How Costs Behave to Change in the Level of Activity