COSTS AND TYPES OF COST

Meaning of cost:
 Cost refer to the amount involved in manufacturing one unit of a given product.

 Costing is the technique and process of ascertaining costs

Classification of Costs:

• Historical Costs
By time • Predetermined Costs

• Material
By nature of • Labour
elements • Overhead

• Product Costs
By association • Period Costs
 • Direct Costs
By Traceability • Indirect Costs

By changes in • Fixed Costs

Activity or • Variable Costs
• Semi Variable Costs
Volume

• Manufacturing Costs
• Administration Costs
By Function • Selling and distribution Costs
• Research and Development Costs
 • Controllable Costs
Controllability • Non-Controllable Costs

• Marginal Costs
Analytical and •
•
Sunk Costs
Marginal Costs
Decision Making • Differential Costs
• Out of pocket Costs etc.

• Capital Expenditure
By nature of expenses • Revenue Expenditure