Four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis are
A)Variable cost,fixed cost,selling cost,and administrative cost.
B)Variable cost,fixed cost,mixed cost,and step cost.
C)Variable cost,fixed cost,period cost,and other cost.
D)Selling cost,administrative cost,cost of goods sold,and depreciation.

Question

Quizplus · Accepted Answer

The four common cost behavior patterns that serve as the foundation for cost-volume-profit analysis are variable cost, fixed cost, mixed cost, and step cost. Variable costs vary in direct proportion to changes in activity level, fixed costs remain constant regardless of activity level, mixed costs have both fixed and variable components, and step costs have a fixed cost component for a range of activity levels, followed by a step increase in cost when activity levels exceed that range. Choices A, C, and D do not accurately reflect the four common cost behavior patterns needed for cost-volume-profit analysis.

Four Common Cost Behavior Patterns That Serve as the Foundation