Asked by Cynthia Frias on Jun 03, 2024
Verified
Which of the following cost classifications do not apply to service organisations?
i. Direct/indirect
ii. Fixed/variable
iii. Production/non-production
iv. Controllable/uncontrollable
A) i and ii
B) ii
C) iii
D) iii and iv
Cost Classifications
The categorization of costs based on their characteristics, purposes, or behavior, such as fixed vs. variable or direct vs. indirect costs.
Service Organisations
Entities that provide intangible products or services to customers, such as healthcare, education, and financial services.
- Recognize and categorize expenses linked to service organizations.
Verified Answer
ZK
Zybrea KnightJun 06, 2024
Final Answer :
C
Explanation :
Service organizations do not involve production of goods, so the cost classification of production/non-production does not apply. Direct/indirect costs and fixed/variable costs may still be relevant in service organizations. Controllable/uncontrollable costs can also be applicable to service organizations.
Learning Objectives
- Recognize and categorize expenses linked to service organizations.
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