cost behavior analysis is the determination of how a firm's costs group of answer choices relate to competitors' costs. relate to general price level changes. relate to general inflation. respond to changes in the level of business activity.

Cost behaviour analysis is management's endeavour to comprehend how operating expenses change in connection to a change in the degree of activity within an organisation. Direct materials, direct labour, and overhead expenses that are incurred during the product development process may be included in these costs. A variable cost's overall amount rises in direct proportion to an activity's growth. A variable cost's overall sum will similarly drop in proportion to a declining activity. The sensitivity of costs to variations in production or sales volume is all that is meant by the term "cost behaviour." The relevant range is the range of output or sales over which cost behaviour patterns stay constant. Fixed expenses Over the relevant range, fixed expenses remain constant overall.

Hence, Cost behavior analysis is the determination of how a firm's costs respond to changes in the level of business activity.

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