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Cost Classification Cost Methods and Cost Technique |
Cost Classification
Cost can be classified in accordance with the purpose for which the cost is needed. Some of the possible classification includes.1. Behavior of the cost in terms of whether it is fixed or variable.
2. The relevant or irrelevance of the cost to the decision on hand.
3. Direct or indirect.
Costing Method
Is a method of cost as ascertainment that centers on the business. For a business that deals with a standardized product made under mass production methods or through a series of production steps calledprocesses the appropriate costing method to use in process costing. On the other hand, where the product made or service rendered is non standardized costing method to use in job costing or contract costing.
Cost Technique
Costing technique refers to the method used to determine the value of finished goods. Among these techniques that give different valuation are:1. Standard costing
2. Marginal costing
3. Absorption costing.
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