To simplify the analysis of cost behavior,decision makers usually assume that costs are either
A)short-run or long-run.
B)fixed or variable.
C)controllable or noncontrollable.
D)direct or indirect.

Question

Quizplus · Accepted Answer

The most common assumption made by decision makers is that costs are either fixed or variable. Fixed costs remain constant regardless of changes in activity levels, while variable costs change proportionally with changes in activity levels. This simplifies cost analysis and helps in decision-making regarding cost reduction, pricing, and volume planning.

To Simplify the Analysis of Cost Behavior,decision Makers Usually Assume