The asymmetrical change in costs when there is a decrease in the volume of activity is called ________.
A) cost stickiness
B) contribution costs
C) curvilinear costs
D) cost adhering

Question

Quizplus · Accepted Answer

Cost stickiness refers to the phenomenon when costs do not decrease proportionately with a decrease in the volume of activity, resulting in an asymmetrical change in costs. This occurs when certain costs are difficult to reduce quickly in response to declines in activity, such as fixed costs or costs associated with long-term contracts or leases. The other options (B, C, D) do not accurately describe this phenomenon.

The Asymmetrical Change in Costs When There Is a Decrease