MALNBrewerCH2-1 - COSTS Costs represent the resources given...

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COSTS Costs represent the resources given up for something. Anything for which we want cost info about is a cost object. For analysis and use in decision making, it is useful to classify costs in various ways. We can classify costs by Behaviour Traceability Relevance Function BEHAVIOURAL CLASSIFICATION To classify costs based on how the total cost changes in relation to a level of activity. Fixed Costs Cost Activity
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Cost Activity This cost classification would hold over a range of activity known as the relevant range. Variable costs change in direct proportion to changes in the activity. VC are fixed per unit. Fixed costs do not change with changes in activity. FC are fixed in total over the relevant range. TRACEABILITY Classifies costs based on whether or not a cost is easily traceable to a cost object. Direct costs Indirect costs Direct costs are costs that can easily and conveniently be traced to a particular cost object. Indirects costs are costs that cannot be easily and conveniently
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MALNBrewerCH2-1 - COSTS Costs represent the resources given...

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