To be useful to management accountants for planning and predictive purposes, mixed costs
A)Must be classified into their fixed and variable elements.
B)Must be classified into their direct and indirect elements.
C)Must be classified into their product and period elements.
D)None of these.

Question

Quizplus · Accepted Answer

Mixed costs contain both fixed and variable elements, making it essential to classify the costs accordingly. This allows for forecasting and budgeting for future periods while also providing insight into cost behavior. Classifying mixed costs into direct and indirect or product and period elements may be necessary for other purposes, but it is not directly relevant to planning and predictive functions of management accounting.

To Be Useful to Management Accountants for Planning and Predictive