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Identify basic cost behavior patterns and explain howchanges in activity level affect total cost...

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Accounting

Identify basic cost behavior patterns and explain howchanges in activity level affect total cost and unitcost?

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Answer The two basic cost behavior patterns are 1 Variable cost and 2 Fixed Cost Variable costs are costs that change as the activity level changes If the activity level is zero variable costs are zero and as activity level increases variable costs also increase at the same proportion Direct material direct labor variable overheads like fuel power etc are example of variable costs For example let us assume a manufacturing set us is working at 50 capacity level at which its production is say 4000    See Answer
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In: AccountingIdentify basic cost behavior patterns and explain howchanges in activity level affect total cost and...Identify basic cost behavior patterns and explain howchanges in activity level affect total cost and unitcost?

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