Costs can be classified in different ways, depending on which data is needed:
1. Direct costs and indirect costs. Direct costs are costs which are directly related to making a product, considering indirect costs this firsthand function cannot be specifically traced to a cost object.
2. Manufacturing costs. In manufacturing costs are categorize as direct costs i.e direct labour
3. Cost behaviour. According to how costs change in response to a change in a cost driver costs are differentiated as variable, fixed and mixed.
4. Relevant and irrelevant costs. …
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