For an Activity Base to Be Useful in Cost Behavior

question 182

Multiple Choice

For an activity base to be useful in cost behavior analysis

• A) the activity should always be stated in dollars.
• B) there should be a correlation between changes in the level of activity and changes in costs.
• C) the activity should always be stated in terms of units.
• D) the activity level should be constant over a period of time.

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Definitions:

Top Management Team

The group of high-ranking executives who are responsible for determining the strategic direction and policies of an organization.

Turnaround Strategy

Strategic actions taken by a company to reverse a period of decline or poor performance and achieve financial recovery.

Workforce

The collective group of people who work in an organization or are available to work in a country or area, including both the employed and the unemployed.

Cost Leadership Strategy

A business approach aimed at becoming the lowest cost producer in an industry, allowing it to undercut competitors on price while maintaining profitability.