Which term refers to categorizing costs according to whether they are capacity,product,customer,batch,or unit costs?
A)The cost hierarchy.
B)Activity-based costing.
C)Traditional costing.
D)None of the answers is correct.

Question

Quizplus · Accepted Answer

The term that refers to categorizing costs according to whether they are capacity, product, customer, batch, or unit costs is the cost hierarchy. It is a way of grouping costs based on the level of analysis and decision-making they are most relevant for. This categorization can assist managers in identifying and understanding the costs associated with different activities, products, customers, or processes. Activity-based costing and traditional costing are costing methods that provide different approaches to measuring and assigning costs, but they do not directly relate to the cost hierarchy.

Which Term Refers to Categorizing Costs According to Whether They