CIMA - Chapter 2.3 - Introduction to costing - Cost classification

Question 1

What is the purpose of Cost Classification?

Cost Classification

Answer 1

Question 2

What is Classification by Nature

Classification by Nature

Answer 2

Classification by Nature focuses on identifying what the cost actually is (e.g., material, labor, or overhead) rather than how or where it is used.

Question 3

What are the main categories of costs by nature?

Classification by Nature

Answer 3

Question 4

Provide Examples of Classification by Nature

Classification by Nature

Answer 4

Question 5

Advantages of Classification by Nature

Classification by Nature

Answer 5

Question 6

Classification of Costs by Behavior

Classification of Costs by Behavior

Answer 6

Classification by behavior refers to the way costs respond to changes in business activity levels, such as production volume, sales, or service delivery

Question 7

Name the Types of Costs by Behavior

Classification of Costs by Behavior

Answer 7

1. Fixed Costs
2. Variable Costs
3. Semi-Variable (Mixed) Costs
4. Step Costs

Question 8

what are Fixed Costs

Classification of Costs by Behavior

Answer 8

Question 9

What are Variable Costs

Classification of Costs by Behavior

Answer 9

Question 10

What are Semi-Variable (Mixed) Costs:

Classification of Costs by Behavior

Answer 10

Question 11

what is the Graphical Representation of Cost Behavior

Classification of Costs by Behavior

Answer 11

Question 12

What is the Importance of Cost Behavior Classification

Classification of Costs by Behavior

Answer 12

Question 13

Examples of Cost Behavior in Different Industries

Classification of Costs by Behavior

Answer 13