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Classification of cost is a fundamental topic of Cost and Management Accounting but many diploma students can’t differentiate between product and period costs and direct and indirect costs. Conventional teaching methods focus more on rote learning than comprehension. As a result, students guess cost classifications instead of reasoning through them systematically. The CostCircle Decision Framework was designed to confront this challenge and embodies a structured three-step decision-making approach that assists students in analysing and classifying costs logically. According to the framework, before deciding on a classification, students must identify the resource involved, where the cost occurs and whether the cost can be traced to a particular cost object. The framework comes with CostCircle Quest, a gamified learning platform that enhances engagement and reinforces learning through interactive practice, instant feedback, and self-assessment opportunities. A pre-test and post-test approach was used to implement the framework to 60 diploma accounting students. Before implementation, cost classification exercises yielded a failure rate of 75%. After the implementation of the CostCircle Decision Framework, 80% of students scored above 50%. Their conceptual understanding and decision-making ability improved significantly. The impact of the innovation shows that embedding a structured decision-making framework within gamified learning can transform engagement with cost classification that is learned with memorizing and guessing to systematic, interesting and evidence-based learning.  The CostCircle Decision Framework provides a pedagogical tool that builds students’ confidence in cost classification, critical thinking and accuracy.