Classifying costs by behavior with changes in volume of activity involves:
A) Identifying fixed cost and variable cost.
B) Identifying both quantitative and qualitative cost factors.
C) Identifying cost of goods sold and operating costs.
D) Identifying costs in a physical manner.
E) Identifying costs as financial or managerial.

Question

Quizplus · Accepted Answer

Classifying costs by behavior with changes in volume of activity involves identifying costs as either fixed or variable. Fixed costs remain constant regardless of changes in volume of activity, while variable costs change in direct proportion to changes in volume of activity.

Classifying Costs by Behavior with Changes in Volume of Activity