Cost behavior refers to the manner in which a cost
A) changes as the related activity changes
B) is allocated to products
C) is used in setting selling prices
D) is estimated

Question

Quizplus · Accepted Answer

Cost behavior refers to how a cost changes as the related activity changes. It describes the relationship between the cost and the level of activity, such as production or sales volume. For example, some costs may remain fixed regardless of the level of activity, while others may increase or decrease as production or sales volume changes. Allocation of costs, setting selling prices, and estimating costs are all related to cost behavior but are not the same as cost behavior itself.

Cost Behavior Refers to the Manner in Which a Cost