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Unformatted text preview: sts for maintaining
the lawnmowers ( which are
costs of maintenance that are
allocated to the
Mowing prod uction center) _________________________________________________________________________________________________________
David W. Young • Management Accounting for Managers • Chapter 2
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In reviewing this exhibit, keep in mind that terms can vary. Sometimes, as was discussed in Chapter 1, “service
center costs,” are called “indirect” costs, and sometimes they are called “overhead” costs. In general, the context
will make the meaning clear.
Cost Behavior in Organizations
Generally, an organization's costs can be classified as either fixed, step-function, variable, or semi-variable. Doing so requires analyzing the actual or expected behavior of each cost item in the organization, and attempting to
determine how these costs change with changes in the volume of activity.
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- Spring '14