The costing system that classifies costs by both functional group and behavior is
A)process costing.
B)job order costing.
C)variable costing.
D)absorption costing.

Question

Quizplus · Accepted Answer

The costing system that classifies costs by both functional group (such as production, marketing, and administration) and behavior (variable, fixed, or mixed) is called a variable costing system. In this system, variable costs are assigned to products produced, while fixed costs are charged to the period in which they are incurred. This method is different from absorption costing (D), which assigns both fixed and variable costs to products, and from process costing (A) and job order costing (B), which primarily focus on the production process and assign costs to products based on the specific production process used.

The Costing System That Classifies Costs by Both Functional Group