Six Categories of Cost

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QUESTION

List and describe the six categories of cost. Additionally, discuss which ones are used in making an incremental cost analysis and why. Choose a product and discuss it in terms of these six categories of costs.

TUTORIAL

In finance and accounting, costs are generally regarded in different ways depending on the manner in which each is incurred.

Assume that you are the head of a multi-national plastics firm interested in undertaking the manufacturing of a new product, QB10. QB10 will supplement the already existing product lines. It will from an extra income for the company. The six categories will be discussed in relation the product QB10

1. Fixed cost: A fixed cost is a cost that does not ...