The terms is used to denote the response of a cost to the change in business activity is Cost behavior.
Cost behavior is used as a tool to show or indicate how a cost will alter or chang in total when there is a change in some activity.
There are three types of cost behavior. Cost Behavior Analysis is simply known as the study of how specific cost respond to changes in the level of business activity.
Conclusively, its knowledge will helps management plan operations and decide between alternative courses of action.
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