The description in mathematical form to represent changes in cost, with level of activity related to that cost is classified as ____________?
Correct answer: D. cost function
- A. relative function
- B. revenue function
- C. unit function
- D. cost function
Explanation
A cost function expresses how total cost changes with an activity or output level, commonly as Y = a + bX. Revenue functions describe revenue rather than cost behavior.
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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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