Cost Behavior Refers to ________

question 114

Multiple Choice

Cost behavior refers to ________.

• A) how costs react to a change in the level of activity
• B) whether a cost is incurred in a manufacturing, merchandising, or service company
• C) classifying costs as either perpetual or period costs
• D) whether a particular expense is expensed in the same or the following period

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Definitions:

Income Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in consumers' income.

Normal Good

A type of good for which demand increases as the income of consumers increases, showing a positive relationship between income and demand.

Sellers

Individuals or entities that offer goods or services for sale in the market.

Output

The total amount of goods or services produced by a company or industry over a specific period.