Cost classification can be done in .a.two ways.b.three ways.c.several ways.d.four ways.
Question
Cost classification can be done in
- a. two ways
- b. three ways
- c. several ways
- d. four ways.
Solution
Cost classification is a crucial aspect of cost accounting that allows businesses to categorize costs based on different criteria for better financial analysis and decision-making. The classification can indeed be done in several ways.
-
By Nature: Costs can be classified based on their intrinsic nature, including materials, labor, and overhead costs.
-
By Behavior: This classification divides costs into fixed, variable, and semi-variable (or mixed) costs, depending on how they respond to changes in production levels.
-
By Function: Costs are also classified based on their functions in the organization, such as production costs, administrative costs, selling and distribution costs, etc.
Each of these classifications serves different purposes and offers unique insights into the financial status and operations of a business. While some resources might indicate two, three, or four ways of classifying costs, it is generally accepted that classification can occur in several different ways based on the analytical needs of the business. Therefore, the best option would be c. several ways.
Similar Questions
Cost classification is the process of categorizing costs based on:a.Time periodsb.Payment methodsc.Cost behaviord.All of the aboveClear my choice
Classification of cost is useful .a.to identify costs.b.to find gross profit.c.to identify efficiency.d.to find net profit.
Fill in the Blank QuestionFill in the blank question.In order for a service provider to use activity-based costing, they should classify costs by level.
Multiple Choice QuestionCosts developed which identify what products should cost are calledMultiple choice question.standard costs.product costs.actual costs.
costs, also called differential costs, are the additional costs from selecting a certain course of action.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.