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Cost Classification by Behavior

The document classifies costs into different categories. Costs can be classified based on their behavior as fixed, variable, or having both fixed and variable components. They can also be classified based on their function as either product costs or period costs. Additionally, costs can be classified based on their traceability as direct costs that can be traced to a specific cost object, or indirect costs that benefit multiple cost objects. Costs also differ in their controllability as either controllable or uncontrollable at the level being measured. Finally, the document discusses classifying costs based on their relevance as either historical, future, or opportunity costs.

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E-kel Anico Jaurigue
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12 views1 page

Cost Classification by Behavior

The document classifies costs into different categories. Costs can be classified based on their behavior as fixed, variable, or having both fixed and variable components. They can also be classified based on their function as either product costs or period costs. Additionally, costs can be classified based on their traceability as direct costs that can be traced to a specific cost object, or indirect costs that benefit multiple cost objects. Costs also differ in their controllability as either controllable or uncontrollable at the level being measured. Finally, the document discusses classifying costs based on their relevance as either historical, future, or opportunity costs.

Uploaded by

E-kel Anico Jaurigue
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Classification by Behavior Costs can be a cost which does not change as the volume of activity (production) changes a cost

st which changes with changes in the volume of activity a cost which has both fixed and variable components

Classification by Function Costs can be a cost which is necessary to produce a finished product a cost which is necessary to run the business during a specified fiscal period

Classification by Traceability Costs can be a cost which is incurred for the benefit of one specific product (cost object) a cost which is incurred for the benefit of more than one cost object or which cannot be easily or efficiently traced to a specific cost object

Classification by Controllability Costs can be a cost which can be affected (controlled) at the hierarchical level which is being measured a cost which cannot be affected (controlled) at the hierarchical level which is being measured

Classification by Relevance Costs can be a cost which has already been incurred and cannot be avoided or changed regardless of future actions -of-pocket a cost which requires future cash outlays a cost measured as the loss of potential benefits by choosing one course of action over another

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