QUESTION a) b) Costs may be classified in a number of ways including classification by behavior, by function, by expense type, by controllability and by relevance. Explain how the various type of cost classification used by the management in their decision making. (25 marks) Costing systems can vary in terms of which costs are assigned to cost objects and their level of sophistication. Typically cost systems are classified to traditional absorption costing systems and activity-based costing systems. Describe the differences between and traditional costing systems and activity-based costing systems. Explain the circumstances when ABC is likely to be preferred to traditional costing systems. (25 marks)