Cost classification can be done in ?

A. two ways
B. three ways
C. four ways
D. several ways

Answer: Option D

Solution

Cost classification can be done in

Cost classification can be done in several ways. Cost classification in economics might involve categories of fixed, variable, opportunity, production and sunk costs.

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On the other hand, accounting costs can be classified as either direct or indirect for a business.

What is Cost Classification?

Cost classification involves the separation of a group of expenses into different categories. A classification system is used to bring to management’s attention certain costs that are considered more crucial than others or to engage in financial modelling.

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