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Chapter 1
Classification of costs
2.1 Production costs
The total costs of an organisation can be categorised as follows:
Total costs
Non-
Production production
costs
costs
Sales,
Direct costs Indirect costs administration
and distribution
costs
Costs directly Can’t be directly
involved in attributed to
production and each unit, such
attributable to as rent,
each unit of depreciation and
production supervisors
salaries
Some of these costs may be fixed and some may be variable.
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