When refining a costing system, a company should classify as many costs as possible as direct costs.

Question

Quizplus · Accepted Answer

Classifying costs as direct costs allows for more precise allocation of costs to specific products or services. This can help improve the accuracy of costing and pricing decisions. However, it may not always be possible to classify all costs as direct costs, especially in cases where costs are shared across multiple products or services.

When Refining a Costing System, a Company Should Classify as Many