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    Shreya Pandey 22717

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    Shreya Pandey
    This document discusses cost classification based on management decision making. It defines cost classification as grouping costs according to common characteristics like nature, behavior, and purpose. Classifying costs helps managers understand cost structures and make profitable decisions. The document outlines different types of costs including direct, indirect, variable, fixed, mixed, and step costs. It emphasizes that classifying costs provides important information for decision making, resource allocation, cost control, and long-term business success.

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    Shreya Pandey 22717

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    Shreya Pandey
    39 views6 pages
    This document discusses cost classification based on management decision making. It defines cost classification as grouping costs according to common characteristics like nature, behavior, and purpose. Classifying costs helps managers understand cost structures and make profitable decisions. The document outlines different types of costs including direct, indirect, variable, fixed, mixed, and step costs. It emphasizes that classifying costs provides important information for decision making, resource allocation, cost control, and long-term business success.

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    This document discusses cost classification based on management decision making. It defines cost classification as grouping costs according to common characteristics like nature, behavior, and purpose. Classifying costs helps managers understand cost structures and make profitable decisions. The document outlines different types of costs including direct, indirect, variable, fixed, mixed, and step costs. It emphasizes that classifying costs provides important information for decision making, resource allocation, cost control, and long-term business success.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    39 views6 pages

    Shreya Pandey 22717

    Uploaded by

    Shreya Pandey
    This document discusses cost classification based on management decision making. It defines cost classification as grouping costs according to common characteristics like nature, behavior, and purpose. Classifying costs helps managers understand cost structures and make profitable decisions. The document outlines different types of costs including direct, indirect, variable, fixed, mixed, and step costs. It emphasizes that classifying costs provides important information for decision making, resource allocation, cost control, and long-term business success.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Classification of cost on basis

    of management decision
    making .

    TO- NEELU MAM


    BY- SHREYA PANDEY
    Cost classification on basis on management
    decision making ………..

     Cost classification is an important aspect of management accounting that


    involves grouping costs based on their nature, behavior, and purpose. By
    classifying costs, management can better understand the cost structure of their
    business and make informed decisions that can impact profitability and
    competitiveness.
    Cost classification :
    It cover’s various types of costs here are the following costs :
    1. Direct costs: These are costs that can be directly traced to a specific product or service, such as the cost of raw
    materials or direct labour.
    2. Indirect costs: These are costs that cannot be directly attributed to a specific product or service, such as rent or
    administrative expenses.
    3. Variable costs: These are costs that vary with changes in production or sales volume, such as the cost of materials
    used to manufacture a product.
    4. Fixed costs: These are costs that remain constant regardless of changes in production or sales volume, such as rent
    or insurance premiums.
    5. Mixed costs: These are costs that have both variable and fixed components, such as utilities.
    6. Step costs: These are costs that remain fixed within a certain range of activity, but increase or decrease when
    activity levels move outside that range.
    Definition and importance of cost
    classification in decision making .
    •Definition of cost classification: The process of grouping costs according to
    their common characteristics.

    •Importance of cost classification for management decision making:

    • Helps managers to make informed decisions by providing relevant


    information about costs
    • Enables effective planning and control of costs
    • Facilitates performance evaluation and helps to identify areas for
    improvement
    Conclusion :
    • In conclusion, we have explored the important topic of cost classification based on management
    decision making in business.
    • We have learned that cost classification is essential in providing meaningful information for
    decision making and helps managers to identify the relevant costs for various business activities.
    • We have discussed the basic cost classifications, Direct costs , Indirect , Variable , Fixed ,Mixed ,
    Step costs as essential tools to aid in cost classification and decision making.
    • The classification of costs provides valuable information that helps businesses to allocate
    resources efficiently, control costs, and make better decisions.
    • By identifying the relevant costs, managers can make more informed decisions that lead to
    increased profits and long-term success for their organization.
    • In conclusion, the classification of costs is an essential aspect of decision making in business,
    and it is important to use these tools effectively to achieve the goals of the organization.
    THANKYOU -

    “ I HOPE THIS PRESENTATION HAS BROUGHT VALUABLE


    INSIGHTS ON TOPIC OF COST CLASSIFICATION OF BASED
    ON MANAGEMENT DECISION MAKING “ .

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