Cost Behavior:

Cost behavior refers to how costs change in response to changes in an organization's level of activity or production. Costs can be classified into three main categories based on their behavior:

Fixed Costs: These costs remain constant in total within a relevant range of activity or production, regardless of the level of output. Examples include rent, insurance premiums, and salaries of permanent staff.

Variable Costs: Variable costs change in direct proportion to changes in activity levels. As production increases, variable costs increase, and as production decreases, variable costs decrease. Examples include raw materials, direct labor, and sales commissions.

Mixed Costs: Mixed costs consist of both fixed and variable components. The fixed portion remains constant within a relevant range, while the variable portion changes with the level of activity. Examples include utilities, where there is a fixed base charge plus a variable charge based on usage.

Cost$-$Volume$-$Profit $($CVP$)$ Analysis:

Cost$-$Volume$-$Profit analysis is a management accounting technique used to analyze the relationship between costs, volume, and profits. It helps businesses understand how changes in sales volume, selling price, variable costs, and fixed costs affect profitability. Key components of CVP analysis include:

Break$-$even Point: The level of sales at which total revenues equal total costs, resulting in zero profit or loss.

Contribution Margin: The amount by which sales revenue exceeds variable costs. It represents the contribution of each unit sold towards covering fixed costs and generating profit.

Profit$-$Volume $($P$/$V$)$ Ratio: Also known as the contribution margin ratio, it measures the relationship between contribution margin and sales revenue. It indicates the percentage of each sales dollar available to cover fixed costs and contribute to profit.

Now, here's an objective type question based on the information provided:

Which type of cost remains constant in total within a relevant range of activity or production?

a$)$ Variable Costs

b$)$ Fixed Costs

c$)$ Mixed Costs

d$)$ Contribution Costs