A traditional GAAP income statement does not help managers predict the financial results of their decisions because the format of the statement is based on cost function rather than cost behavior.Which of the following is not classified as a cost behavior?
A)Product
B)Fixed
C)Variable
D)Fixed and Variable

Question

Quizplus · Accepted Answer

Product is not classified as a cost behavior. Cost behavior refers to how costs react to changes in the level of activity, such as variable costs which increase as activity levels increase, or fixed costs which remain constant regardless of activity levels. Product is a good or service that a company produces or sells.

A Traditional GAAP Income Statement Does Not Help Managers Predict