Mixed Costs

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Assignment Details

This assignment has 3 parts:

Costs can be categorized in the following ways:

  • Actual vs. budgeted cost
  • Full cost vs. direct cost
  • Fixed vs. variable vs. mixed costs
  • Relevant vs. irrelevant costs
  • Product vs. period
  • Direct vs. indirect

Discuss the following questions:

  1. Why is it important for a company to know the categorization of each cost?
  2. How can this information be used in decision making?
  3. Provide an example of each of the cost categorizations above.

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