What does cost behaviour analysis focus on?
A)the reaction of costs to changes in profit
B)the reaction of costs to change over time
C)the reaction of costs to changes in activity level.
D)the reaction of costs to changes in benefit

Question

Quizplus · Accepted Answer

Cost behaviour analysis focuses on how costs react to changes in activity level, such as production volume or sales volume. This analysis can help a company understand the relationship between its costs and its level of output, and make decisions about pricing, production levels, and other factors that affect profitability. A and D are incorrect because cost behaviour analysis does not focus on changes in profit or benefit specifically. B is partially correct, but does not capture the primary focus of cost behaviour analysis.

What Does Cost Behaviour Analysis Focus On