Costs Classification by Behaviour Step-Wise Costs D remain fixed over limited ranges of volumes but increase by a lump sum when volume increases beyond maximum amounts n Example: additional production supervisors must be added when another shift is added Production Volume Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 16
16 Costs Classification by Behaviour ⧫ Step-Wise Costs remain fixed over limited ranges of volumes but increase by a lump sum when volume increases beyond maximum amounts. Example: additional production supervisors must be added when another shift is added. Supervisory Salaries Production Volume
Costs Classification by Controllability ◆ Controllableⅴs. not controllable n depends upon the employee's responsibilities n Example: A lower level manager may have control over overtime costs but not over the purchase of high-cost machinery. Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 17
17 Costs Classification by Controllability ⧫Controllable vs. not controllable depends upon the employee’s responsibilities. Example: A lower level manager may have control over overtime costs but not over the purchase of high-cost machinery
Costs classification by Traceability Q Management often traces costs to cost objects n To obtain a better measure of their total cost n Cost objects include → Products ervices Departments divisions Customer groups Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 18
18 Costs Classification by Traceability ⧫Management often traces costs to cost objects To obtain a better measure of their total cost Cost objects include →Products →Services →Departments →Divisions →Customer groups