Define cost behavior. Identify and explain the five general types of cost behavior.

1) Variable Costs: These costs are directly proportional to the level of activity, meaning that as one increases, so does the other. An example of this type of cost would be raw materials used for producing goods.

2) Fixed Costs: This type of cost remains constant regardless of any fluctuations in activity levels. Examples include rent and salaries for employees who work on a fixed wage rate.

3) Step Costs: These costs change at predetermined points due to factors such as increased demand or additional resources being required which then remain constant until the next step occurs again down the line. Examples here include overtime payments & advertising campaigns.

4) Semi-variable Cost: This type involves both fixed and variable components (e.g.: telephone bills). The amount paid will depend on usage plus any additional fees charged by provider over time.

5) Mixed Costs: These involve more than one factor affecting them such as labour plus materials & equipment hence why they can’t be classified under any single category but rather require their own unique approach when considering related expenses.

In conclusion, understanding how different types of costs behave is essential when it comes to managing finances effectively as it provides insights into where funds should be allocated/redistributed depending on situation faced thus enabling organisations better control over budgeting decisions made over time.