Widely-used cost classification schemes include:

Question

Quizplus · Accepted Answer

Direct and indirect costs and variable and fixed costs are the two most widely used cost classification schemes in business organizations. The classification of costs into direct and indirect costs is based on the relationship of costs with the production process, whereas the classification of costs into variable and fixed costs is based on the nature of the cost behavior. Therefore, option E, which includes both direct and indirect costs and variable and fixed costs, is the correct choice. Choice C, decision making and control costs, is not a widely-used cost classification scheme.

Widely-Used Cost Classification Schemes Include