The costs are classified as fixed or variable on the basis of __________?
Correct answer: D. both a and b
- A. specific activity
- B. given time period
- C. common activity
- D. both a and b
Explanation
Whether a cost is fixed or variable depends on the specified activity level and the particular time period being considered. A cost may be fixed in the short run but variable over a longer period, so both factors matter.
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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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