Cost classification

Question 1

Cost classification

Answer 1

Function: financial accounts preparation
element: cost control
nature: cost accounting
behaviour: budgeting and decision making

Question 2

By function

Answer 2

Rule of law- producting financial accounts follow set formats
cost of sales- production labour, materials
selling and distribution- advertisiing
adminstrative costs-IT support
finance costs- banks

Question 3

By element

Answer 3

want to control costs understand spending

materials- costs of raw materials
labour- basic pay
overheads- other expenses