In account analysis, an account is classified as either variable or fixed based on an analyst's prior knowledge of how the cost in the account behaves.

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This statement is true. Accounts are classified as either variable or fixed based on an analyst's prior knowledge of how the cost in the account behaves. Variable accounts fluctuate in relation to changes in volume or activity level, while fixed accounts remain the same regardless of changes in volume or activity level.

In Account Analysis, an Account Is Classified as Either Variable