Question

Cost behavior is useful to managers for making decisions regarding all of the following except a.hiring a new manager. b.estimating costs. c.replacing a machine. d.predicting profits as sales and production volume change.

Answer 1

A) hiring a new manager.

Step-by-step explanation:

Cost behavior analyzes how the costs of a business unit, department or process will be affected if one or several activities change. E.g. how much will variable costs change if we eliminate salespeople's fixed wage and only pay according to sales commissions. Or how much will our fixed costs increase if we purchase the new machinery.

Cost behavior classifies costs as:

• variable: change when output changes
• fixed: do not change when output changes
• mixed: some of the costs remain the same when output changes, but other parts change as output changes

If the new manager just replaces an old manager, then the cost will not change.