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How can the given information be used in decision making

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Reference no: EM131818792

Assignment

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.

Reference no: EM131818792

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