COST
the term cost means the amount of expenses incurred to a specified thing or activity.
Asper ICW act “cost is a measurement in monitory terms of the amount of resources used for the purpose of production of goods or rendering services”
CLASSIFICATION OF COST
cost classification is the process of grouping of cost according to common characteristics. Following are the important cost classifications.
- ACCORDING TO NATURE
- ACCORDING TO FUNCTION
- ACCORDING TO
IDENTIFIABILITY
ACCORDING TO BEHAVIOR
ACCORDING TO CHANGE IN VOLUME
ACCORDING TO ASSOCIATION WITH PRODUCT
ACCORDING TO CONTROLLABILITY
ACCORDING TO NORMALITY
ACCORDING TO TIME
ACCORDING TO RELEVANCE
ACCORDING TO MANAGERIAL DECISIONS
- ACCORDING TO NATURE: total cost can classify on the basis of it's nature. the classification under this head are material cost, labor cost and expenses.
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