Classification of costs and cost behaviour

Chapter 5

1. Classification of Costs
Functional or Responsibility Analysis of Costs Product Costs and Period Costs Controllable Costs and Uncontrollable Costs Cost Analysis by Behavior Direct Costs and Indirect Costs

2. Cost Behavior Patterns

Fixed Costs Unit
Fixed Costs in Total Fixed Cost Per

Variable Costs
Variable Costs in Total Variable Costs- Cost Per Unit

Simi-Variable Costs Stepped Costs The Relevant Range of Activity

3. Direct Costs and Indirect Costs

Types of Costs
Materials for the manufacture of goods Purchases of finished goods for resale Wages Salaries Other overheads

Example of Direct and Indirect Costs