Cost behavior refers to ________.
A) how costs react to a change in the level of activity
B) whether a cost is incurred in a manufacturing, merchandising, or service company
C) classifying costs as either perpetual or period costs
D) whether a particular expense is expensed in the same or the following period

Question

Quizplus · Accepted Answer

Cost behavior refers to how costs react to a change in the level of activity, such as production or sales. It helps managers understand how costs will change in response to changes in activity levels, which is important for forecasting and budgeting purposes. Choices B, C, and D are unrelated to cost behavior.

Cost Behavior Refers to ________