Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Cost behaviour 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 inventoriable or period costs.
D)whether a particular expense has been ethically incurred.
E)how costs react to a change in selling price.

Question

Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
  Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Cost behaviour 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 inventoriable or period costs. 
D)whether a particular expense has been ethically incurred. 
E)how costs react to a change in selling price.

Quizplus · Accepted Answer

Cost behavior refers to how costs react to a change in the level of activity, such as production or sales volume. The other options are not accurate definitions of cost behavior.

Use the Information Below to Answer the Following Question(s)