Question
THE ANSWER BELOW WAS WRITTEN BY MY CLASSMATE PLEASE RESPOND TO IT IN BY ARGUING WITH THE ANSWER OR AGREEING TO IT , A PARAGRAPH
THE ANSWER BELOW WAS WRITTEN BY MY CLASSMATE PLEASE RESPOND TO IT IN BY ARGUING WITH THE ANSWER OR AGREEING TO IT , A PARAGRAPH OR TWO . THANKS !!
Analyzing cost behavior is extremely important when it comes to management, it allows you to make good financial decisions and predictions. There are 3 forms of cost behavior, variable, fixed, and mixed.
Variable costs are the amount incurred for every unit of volume. When there is a change in volume the total variable cost will change.
Fixed Costs do not change when the volume changes.
Mixed Costs will contain both a variable and a fixed cost.
Out of these 3 forms of cost behavior, I believe mixed cost is the most accurate. By including both variable and fixed costs in the same function you allow there to be more flexibility when analyzing costs. You can use a mixed costs function to create a graph that will give a good visualization of how cost behavior. This is very important as sometimes it can be a lot harder to wrap your mind around a function and including a graph gives a much better picture.
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