[Verse 1] When the factory floor is humming and the products take their shape Every dollar that we're spending has a story to relate Some costs touch each single item, we can trace them line by line Direct materials and labor, easy costs for us to find [Chorus] Direct or indirect, we sort them out Fixed or variable, know what it's about Product or period, timing is the key Cost classification sets our business free D-I-F, P-V-P, remember these three ways Cost classification guides us through the maze [Verse 2] But indirect costs are sneaky, they support the whole operation Factory rent and supervision spread across our full creation We can't trace them to one product though they help make everything Overhead allocation methods make these stubborn costs take wing [Chorus] Direct or indirect, we sort them out Fixed or variable, know what it's about Product or period, timing is the key Cost classification sets our business free D-I-F, P-V-P, remember these three ways Cost classification guides us through the maze [Bridge] Fixed costs stay the same no matter what we make Rent and salaries, they never seem to break Variable costs will rise with every single unit Raw materials dancing to production's tune [Verse 3] Product costs attach themselves to inventory on hand Materials, labor, overhead join together as planned Period costs expire quickly, they can't wait around Selling costs and admin fees hit the income statement ground [Chorus] Direct or indirect, we sort them out Fixed or variable, know what it's about Product or period, timing is the key Cost classification sets our business free D-I-F, P-V-P, remember these three ways Cost classification guides us through the maze [Outro] When you're sorting every dollar, keep these categories near Cost classification fundamentals make the picture crystal clear
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