Cost Classification, Costing Methods, and Break-Even Analysis
Classified in Mathematics
Written on in
English with a size of 3.83 KB
Cost Classification and Analysis for Business Success
Understanding Cost Classifications
Costs can be classified in several ways, providing different insights for business decision-making:
- Function: Such as the department incurring the cost (e.g., production, administration).
- Type: Categorized as Direct or Indirect costs.
- Behavior: How costs react to changes in output, including Fixed, Variable, and Semi-Variable costs.
- Time: Costs associated with a specific period (e.g., period costs).
Direct Costs (Prime Costs)
Direct Costs are expenses that can be easily and directly related to the production of a specific item or service. They are also known as prime costs. For example, the salaries of employees working directly in a production department or the... Continue reading "Cost Classification, Costing Methods, and Break-Even Analysis" »