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