An accountant may have difficulty classifying costs as fixed or variable because ________.
A)costs may behave in a nonlinear way
B)costs may be affected by more than one cost driver
C)it depends on the decision situation
D)all of the above

Question

Quizplus · Accepted Answer

All of the given options can create difficulty in classifying costs as fixed or variable. Costs may not behave in a linear way, meaning that they may not vary in direct proportion to the level of activity. Costs may also be affected by more than one cost driver, making it challenging to determine which driver is actually impacting the cost. Additionally, the classification of costs as fixed or variable may depend on the decision situation, as some costs may be classified as fixed in one context and variable in another.

An Accountant May Have Difficulty Classifying Costs as Fixed or Variable