Which of the following cost classifications do not apply to service organisations?
i. Direct/indirect
ii. Fixed/variable
iii. Production/non-production
iv. Controllable/uncontrollable
A) i and ii
B) ii
C) iii
D) iii and iv

Question

Quizplus · Accepted Answer

Service organizations do not involve production of goods, so the cost classification of production/non-production does not apply. Direct/indirect costs and fixed/variable costs may still be relevant in service organizations. Controllable/uncontrollable costs can also be applicable to service organizations.

Which of the Following Cost Classifications Do Not Apply to Service