Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

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Answer 1

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

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Answer 2

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

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Answer 3

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

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Answer 4

Textbook Question

Chapter 3, Problem 1DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

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Answer 5

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Answer 6

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Answer 7

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 8

Expert Solution & Answer

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 9

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Answer 10

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Answer 11

To determine

State the importance of cost behavior for managerial decision making and provide an example.

Answer 12

Explanation of Solution

Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the organizations’ functions of planning, controlling and decision making.

Cost behavior patterns enable managers to make cost predictions that result from changes in activity. Cost predictions are used in planning, control, and decision making. For example, in order to plan operations and prepare budget, managers must predict costs that is incurred at different stages of production and sales.

Answer 13

Ch. 3 - Why is knowledge of cost behavior important for...Ch. 3 - How does the length of the time horizon affect the...Ch. 3 - Prob. 3DQ Ch. 3 - What is the relationship between flexible...Ch. 3 - What is the relationship between committed...Ch. 3 - Describe the difference between a variable cost...Ch. 3 - Why do mixed costs pose a problem when it comes to...Ch. 3 - Why is a scattergraph a good first step in...Ch. 3 - What are the advantages of the scatterplot method...Ch. 3 - Prob. 10DQ

Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

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