The cost flow would be different depending on the business or organization if it is for service, trading or

manufacturing business. The cost flow of service is different from trading or manufacturing business
because its function is to provide service at the point of consumption by the customers in which it shows
that there are no products involved. This focuses on marketable services that are delivered to
individuals or other organizations. The costs of the business who provide service depends on the
demand for such a service as there is no inventory. For trading its cost flow is different from service and
manufacturing business because its focus is on the procuring tangible goods or products that are
distributed to the customers. The cost of goods sold for the trader is equal to opening trading goods plus
purchases of trading good less closing trading goods. Lastly manufacturing business differs from service
and trading because of the raw materials that are purchased and converted in order to make a new
product for sales. This focuses on using labor or machinery to produce marketable products using raw
materials. Its cost of goods sold for the manufacturer is equal to opening finishing goods plus cost of
goods manufactured less closing finished goods. There cost flow are all different because of the
functions or process and the products used to operate the business.

The mixed costs are needed to be separate into variable costs and fixed costs in order to predict if the
activity level changes. There are some methods used to separate mixed costs to variable costs and fixed
costs. These methods help the company to determine the total costs. If the company have already
classified the mixed costs into variable costs and fixed costs they can already predict the total costs. The
managers of the organization or business need to separate mixed costs as a variable costs or fixed costs
in order to predict and plan for the future.