Reference no: EM132475063

Question 1. If the Management of a firm had the discretion of categorizing a cost as either a product or period cost, which do do you think they would prefer and why? The use of a quantitative example to illustrate your response may be provided.

Question 2. Variable costs are said to remain at a fixed rate per unit in a "relevant range". Describe why or provide and example of how and whey variable cost per unit may increase or decrease at certain levels and that a variable cost line on a graph may not actually be linear and are actually curvilinier in the real world.

Question 3. This module predominantly dealt with cost classifications. Why do you believe it is so important for a firm's management to properly classify costs? What could be the result of a material improper cost classification?

Question 4. In contrasting a traditional format income statement to a contribution format income statement, which to believe would be more useful for management's and or external usage and why?