(a) What is cost behavior analysis? (b) Why is cost behavior analysis important to management?

Question

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Answer 1

Textbook Question

Chapter 5, Problem 1Q

(a) What is cost behavior analysis?

(b) Why is cost behavior analysis important to management?

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

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Answer 2

Textbook Question

Chapter 5, Problem 1Q

(a) What is cost behavior analysis?

(b) Why is cost behavior analysis important to management?

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

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Answer 3

Textbook Question

Chapter 5, Problem 1Q

(a) What is cost behavior analysis?

(b) Why is cost behavior analysis important to management?

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

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Answer 4

Textbook Question

Chapter 5, Problem 1Q

(a) What is cost behavior analysis?

(b) Why is cost behavior analysis important to management?

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

Answer 8

(a)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: (a) Meaning of cost behavior analysis

Answer 13

Explanation of Solution

Cost tends to change with change in the business condition, therefore this change in cost with respect to the business conditions is analyzed and this is known as cost behavior analysis.

Different types of costs are incurred in the business some of them change as per the production, whereas some of the costs do not change with the change in level of production. This irregular behavior of production is referred as cost behavior.

Answer 14

Conclusion

Thus, cost behavior analysis is change in cost due to change in business conditions.

Answer 15

(b)

Expert Solution

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.

Conclusion

Thus, cost behavior analysis is important for the management of the company.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Importance of cost behavior analysis for management.

Answer 20

Explanation of Solution

Any kind of managerial decision or the final price of the product depends on the cost incurred in production. Therefore, cost analysis is very important factor.

The importance of cost behavior analysis is as given below:

A proper idea of cost should be known because the cost factor decides which course of action the firm should follow.
Different types of costs are incurred in the business some of them changes as per the production, whereas some of the cost do not change with the change in level of production. Therefore, the price of the product totally depends on cost.