Understanding cost behavior helps managers in planning the optimal mix of services or products to offer.

Question

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Understanding cost behavior allows managers to determine which services or products are the most profitable and to make informed decisions about pricing, production, and resource allocation. Without this knowledge, managers may make decisions that could result in unnecessary costs and ultimately lead to lower profits or even financial losses. Therefore, understanding cost behavior is essential for effective planning and decision-making.

Understanding Cost Behavior Helps Managers in Planning the Optimal Mix