In estimation of cost functions, the variations in a single activity level represents the __________?
Correct answer: A. related total costs
- A. related total costs
- B. related fixed cost
- C. related variable cost
- D. related per unit cost
Explanation
Cost-function estimation examines how total costs change when the activity level changes. Fixed and variable costs describe components of total cost, not the costs related to the observed activity variation itself.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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