Learning Objective 01-C2: Describe accounting concepts useful in classifying costs.

 Learning Objective 01-C2: Describe accounting concepts useful in classifying costs.


We can classify costs as (1) fixed vs. variable, (2) direct vs. indirect, and (3) product vs. period. A cost can be classified in more than one way, depending on the purpose for which the cost is being determined. These classifications help us understand cost patterns, analyze performance, and plan operations.

 

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