Why is knowledge of cost behavior important

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1. Why is knowledge of cost behavior important for managerial decision making? Give an example to illustrate your answer.

2. What is a driver? Give an example of a cost and its corresponding output measure or driver.

3. Suppose a company finds that shipping cost is $3,560 each month plus $6.70 per package shipped. What is the cost formula for monthly shipping cost? Identify the\ independent variable, the dependent variable, the fixed cost per month, and the variable rate.

Reference no: EM131342496

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