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.
- Basis of function
- manufacturing cost
- administrative cost
- selling and distribution cost
- basis of behaviour
- fixed cost
- variable cost
- semi-variable cost
- basis of identity
- direct cost
- indirect cost
- basis of management decision making
- opportunity cost
- marginal cost
- shut down cost
ELEMENTS OF COST
the
cost of production consist of various expenses incurred production of
goods and services. This are the main elements of cost, which can be
divided in to three
- material
- labour
- expenses
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