Answer to Question #172489 in Accounting for Ibrahim Oluwambe

Question

The analysis of total cost in to it's behavioral element is essential for effective cost accounting and management accounting.

Require:

Comment on this statement above

Illustrate your answer with example of cost behavioral patter.

Best Regards

Answer 1

Cost behavior analysis is important to management in planning business operations and in deciding between alternative courses of action. The activity index identifies the activity that causes changes in the behavior of costs.