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Cost behavior refers to the manner in which a cost a.is allocated to products b.is estimated c.changes as the related activity changes d.is used in setting selling prices

Respuesta :

Answer:

The correct answer is letter "C": changes as the related activity changes.

Explanation:

Cost behavior refers to the changes in total costs in front of changes due to certain events. Cost behavior is responsible for companies to classify costs in fixed costs -total costs do not vary even if there are changes in production, variable costs -total costs change when production changes, and mixed costs which is a combination of fixed and variables costs.

For a company, rent represents a fixed cost while raw materials represent a variable cost.

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