A traditional GAAP income statement does not help managers predict the financial results of their decisions because the format of the statement is based on cost function rather than cost behavior.Which of the following is not classified as a cost function?
A)Product
B)Sales
C)Administration
D)Variable

Question

Quizplus · Accepted Answer

Cost functions typically categorize costs based on their function within the business, such as product (manufacturing), sales, and administration costs. Variable costs, however, are categorized based on their behavior in relation to production volume, not their function.

A Traditional GAAP Income Statement Does Not Help Managers Predict