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They cannot be identified directly with specific units.
Remote costs – are costs which cannot be associated closely with any particular revenue generating function within the business, but which are incurred on behalf of the whole organization.
Product and Period costs – are those costs which are treated as expenses in the period in which they are incurred.
Classification by Function
1. Premises costs
These are the costs that are related to the area in which a business runs its work.
• Rent – some businesses might not own the work area, therefore the company must pay the owner for the rent...
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