Type of Firms:

1. Manufacturing
2. Merchandising
3. Service

Type of Inventories:
1. Raw Materials Inventory
2. Work in Process Inventory
3. Finished Goods Inventory

Following Cost Classification is for a Manufacturing Firm:

Direct Material
Prime Cost
Manufacturing
Costs/ Product Direct Labor
Cost

Manufacturing
Overhead
Conversion Cost
Costs

Selling Cost
Non-
Manufacturing
Costs/ Period Cost
Administrative
Cost

Per Unit In Total

Fixed Cost Varies Fixed
Variable Cost Fixed Varies

IT IS TRUE FOR A RELEVANT RANGE