The relationship between a cost and the level of activity is known as the cost behaviour.

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The relationship between a cost and the level of activity is known as cost behavior. The behavior of a cost can be described as either variable, fixed, or mixed. Variable costs change in proportion to changes in activity levels, while fixed costs remain constant regardless of changes in activity levels. Mixed costs have both variable and fixed components. Understanding cost behavior is important in analyzing and managing costs in a business.

The Relationship Between a Cost and the Level of Activity