Describe the concept of cost behaviour. Explain why it is important to understand cost behaviour? Orient Trading Co. sells products B and C. Sales for February were 400 units of B at $25 and 800 units of C at $45. A price rise of $5 per unit will be effective from March 1 on both products. It is expected that this will result in a 5% fall in the number of units of product B sold, and a 10% fall in the number of units of C sold during March compared with February. Required: Prepare a Sales Budget for Orient Trading Co. for March.

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Cost behavior refers to how costs change in relation to changes in activity levels within a business It describes how costs vary based on factors such ... View the full answer