What are the factors that affect the classification of a cost as direct or indirect?
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Name three factors that will affect the classification of a cost as direct or indirect? Show  Q: Cost is being classified in a varity of ways, what benefits can be acquired out of this… A: Classification by the management in their decision making is significant to help management in the… Q: Distinguish between a traceable cost and a common cost. Give several examples of each. A: Fixed Expense: It is the expense incurred by a company not related to the volume of output… Q: Define direct costs and indirect costs? A: Direct cost: Direct cost is the cost assigned to the cost object which is directly related to that… Q: Give four differences between implicit cost and explicit cost? A: Explicit cost: Explicit cost refers that, a direct payment made by firm to others in course of… Q: What is the definition of a cost object? A: This question explains about the cost object. Q: Explain the difference between direct costs and indirect cost A: Direct cost is the cost incurred by the organization while performing their center business process… Q: Distinguish between indirect costs and direct costs. A: Direct Costs and Indirect Costs are two important costs. Direct costs are those costs which are… Q: Describe three criteria for evaluating cost functions and choosing cost drivers. A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in… Q: Describe three criteria for evaluating cost functions and choosing cost drivers. A: Cost Function: Cost function represents the basic change comes in the total cost due to the change… Q: indicate which of the following classifications best describe the cost. More than one classification… A: Click to see the answer Q: Name four approaches to estimating a cost function. A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in… Q: Name four approaches to estimating a cost function A: Cost function: Cost function represents the basic change that comes in the total cost due to the… Q: Distinguish between the following concepts a. Sunk costs and Opportunity Costs A: Solution:- a)Distinguish between Sunk costs and Opportunity Costs as follows:- Sunk costs:- A sunk… Q: Distinguish between direct costs and indirect costs A: The direct costs can be referred to the production process while the same is not possible for… Q: a. From the above case, identify the type of cost classification discussed. A: Hello, since the student has posted multiple requirements, only the first one is answerable. Thank… Q: List three methods to measure cost behavior. A: Click to see the answer Q: Label each of the following statements as either true (“T”) or false (“F”). Relevant costs are also… A: Relevant costs: These costs can be defined as the costs that can be avoided if we choose over option… Q: Define the following terms: (a) cost behavior and (b) relevant range. A: Cost behavior and relevant range are terms under cost accounting. Cost behavior studies the pattern… Q: Define the following terms: (a) cost behavior and (b) relevant range. A: (a) Cost behavior: Cost behavior defines the behavior of cost. It defines how cost will change due… Q: Define the following terms: (a) cost behavior and (b) relevant range. A: (a) Cost behavior: Cost behavior defines the behavior of cost. It defines how the cost will change… Q: What are the different type of costs? Describe each. A: In cost accounting, The accounting process deals with the total costs incurred in the production… Q: What are the three common features of cost management? A: Cost management:Cost management is a type of management accounting that estimates expenses involved… Q: What are three common features of cost accounting? A: Cost Accounting: Cost accounting refers that branch of accounting, which records and analyzes the… Q: Classify the following costs into (a) Product or Period Costs and (b) whether it is Fixed or… A: “Since you have asked multiple questions, we will solve the first question for you. If you want any… Q: Understand thedifferences between directand indirect costs A: Cost: It refers to the economic value incurred by an organization for manufacturing a product or… Q: Define the following terms: differential cost, sunk cost, and opportunity cost. A: Differential cost: Differential cost is the change in total cost due to increase or decrease in… Q: Identify each of these costs as fixed, variable, or mixed. A: Click to see the answer Q: Classify the costs as either fixed costs, variable costs, or mixed cost. A: Variable costs: These are the costs that proportionately change with the changes in the activity… Q: Explain how each of these costs would be accounted for. A: Cost: It is the economic value incurred by a company to manufacture a product or to render a… Q: Distinguish between the following set of terms: Direct product costs and indirect product… A: Product Cost - Product Cost is the cost incurred by the organization for the product of the entity.… Q: What two assumptions are frequently made when estimating a cost function? A: Assumptions when estimating a cost function: 1) Variations in the level of a single activity the… Q: Define and give examples of the following terms: cost pool, cost object, and cost allocation (or… A: Responsibility accounting: Responsibility refers to the several concepts and tools used by managers… Q: What is the difference between cost allocation and cost assignment? A: Click to see the answer Q: What is the definition of cost? A: In the business, costs are the important measures to determine the value of elements being purchased… Q: Distinguish between inventoriable costs and period costs? A: Inventoriable costs: Inventoriable costs refer to the cost incurred in manufacturing a product which… Q: Why aren’t common costs allocated to segments under the contribution approach? A: Segment margin is a useful measure to assess the performance of an operating unit. A common fixed… Q: Explain difference between prime costs and conversion costs. A: Prime cost: It is the cost which is incurred for manufacturing a product. It includes direct… Q: ost classifications used for assigning costs to cost objects include: Multiple Choice Variable cost… A: Cost Classification Determining the cost in the organisation is one of the important part in the… Q: Instructions a. Define the terms variable costs, fixed costs, and mixed costs. b. Classify each cost… A: Answer a) VARIABLE COST:- A variable cost is an expense that rises or falls in direct proportion to… Q: How should mixed costs be classified in cost, volume, and profit analysis? A: Based on the cost behaviour costs are classified as fixed costs , variable costs and mixed costs.… Q: Define cost allocation? A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. Recommended textbooks for you Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. 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Hansen, Dan L. Heitger Publisher:Cengage Learning Survey of Accounting (Accounting I) ISBN:9781305961883 Author:Carl Warren Publisher:Cengage Learning What are the factor that affect classification of cost direct and indirect?Direct costs are attributable to a specific product, department, goods, or service. On the other hand, indirect costs are attributable to multiple products or services. Direct costs are variable costs that change based on the quantity of a product or service. However indirect costs are fixed costs.
What factors affect direct cost?Direct costs. Manufacturing supplies.. Equipment.. Raw materials.. Labor costs.. Other production costs.. Which factor determines whether a cost is direct or indirect?The materiality of the cost is a factor in classifying the cost as a direct or indirect cost. The cost of electricity used in the production of multiple products would be classified as a indirect cost. Some fixed costs may be classified as direct manufacturing costs.
Which basis cost can be classified as direct and indirect cost?Direct costs usually benefit only one cost object. Items that are not direct costs are pooled and allocated based on cost drivers. Direct and indirect costs are the major costs involved in the production of a good or service. While direct costs are easily traced to a product, indirect costs are not.
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