Cost Behavior Is Defined as the Manner in Which Costs

question 103

True/False

Cost behavior is defined as the manner in which costs respond to changes in volume or activity.

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Definitions:

Revenue Variances

The difference between actual revenue and budgeted or forecasted revenue, indicating performance against financial goals.

Fixed Cost Estimates

These are projections of costs that do not change in total with changes in business activity level, such as rent or salaries.

Planning Budget

A financial plan that estimates income and expenditure for a future period.

Cost Drivers

Factors that cause the cost of an activity to increase or decrease, influencing the total cost.