Describe and Explain the Two Types of Fixed Costs Classifications

question 91

Essay

Describe and explain the two types of fixed costs classifications that are found when a company prepares a segmented income statement as opposed to a variable costing income statement.

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Definitions:

Credit Sales

Transactions where the customer buys goods or services on account, paying the supplier at a later date.

COGS

The specific costs tied to manufacturing goods that a business sells.