When a Manager Talks About Cost Behavior,she Is Referring to

question 161

Multiple Choice

When a manager talks about cost behavior,she is referring to

• A)the way in which total costs change in response to changes in the level of activity.
• B)the method used to determine whether a cost is accrued or expensed.
• C)both the way in which total costs change in response to changes in the level of activity and the method used to determine whether a cost is accrued or expensed.
• D)neither the way in which total costs change in response to changes in the level of activity or the method used to determine whether a cost is accrued or expensed.

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Definitions:

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Profitability

A measure of the efficiency and success of a business in generating profits from its operations over a period of time.

Horizontal Analysis

A financial analysis technique that examines the changes in the amounts of specific financial statement items over a period of time.

Base Year Figure

A reference point in time used for comparison in financial and economic analysis to track changes and trends.