Measurement of cost behavior means understanding and quantifying how activities of an organization affect its levels of costs.

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Cost behavior refers to understanding how different activities, such as production levels, sales volume, or changes in technology, affect an organization's costs. Measuring cost behavior involves identifying the relationship between costs and their underlying drivers, such as activity levels or time. By understanding and quantifying cost behavior, managers can make better decisions about pricing, product mix, production volumes, and other key business activities.

Measurement of Cost Behavior Means Understanding and Quantifying How Activities