Cost behavior analysis focuses on how costs
A) react to changes in profit.
B) react to changes in activity level.
C) change over time.
D) both a and C

Question

Quizplus · Accepted Answer

Cost behavior analysis primarily examines how costs change in response to changes in activity level. While costs can also change over time, this is not the central focus of cost behavior analysis. Additionally, costs do not necessarily react directly to changes in profit, as profit is the result of both costs and revenue, and changes in profit could be due to changes in either or both.

Cost Behavior Analysis Focuses on How Costs