COST CONCEPTS / CLASSIFICATION OF COSTS

1. According to functions

• Administration cost / office cost
• Selling cost
• Production cost / factory cost / manufacturing cost
• Distribution cost

2. According to the nature of the costs

• Semi - variable or semi-fixed cost
• Step costs
• Fixed cost
• Variable cost

3. According to the controllability

• Uncontrollable cost(Uncontrollable throughout authority and liability laid down by the organizational formation)
• Controllable cost (controllable throughout authority and liability laid down by the organizational formation)

4. According to normality

• Abnormal cost
• Normal cost

5. According to relevance to decision making

• Conversion cost (cost of transforming raw material into finished stock)
• Sunk cost (historical or past paid cost)
• Shut down cost (fixed cost)
• Replacement cost (cost of replacing assets)
• Imputed cost (non- cash cost which is calculated)

6. Others

• Relevant cost and irrelevant cost (relevant to the decision at hand)
• Out of pocket cost (Cash expenses)
• Direct cost and indirect cost (based on traceability to the final product or service)
• Avoidable / escapable and unavoidable costs
• Product costs and period costs (fixed costs and variable costs)
• Opportunity cost (cost of an opportunity lost)
• Imputed or Hypothetical cost (non-cash expenditure)
• Decision making costs and accounting costs
• Differential, incremental or detrimental costs
• Joint costs and common costs etc
• Traceable, untraceable / common costs

Posted Date: 10/15/2012 6:52:11 AM | Location : United States

Ask an Expert

Related Discussions:- Cost concepts / classification of costs, Assignment Help, Ask Question on Cost concepts / classification of costs, Get Answer, Expert's Help, Cost concepts / classification of costs Discussions

Write discussion on Cost concepts / classification of costs
Your posts are moderated

Write your message here..

Related Questions

Budget, a company has the budget for manufacturing overhead based on direct... a company has the budget for manufacturing overhead based on direct labor hours. budgeting at 10,000 direct labor hours are as follows. Variable costs= 160000 Fixed Costs

Homework, i need help on my homework i need help on my homework

Process costing.., given formula given formula

Functional classification of costs, Functional Classification of Costs ... Functional Classification of Costs Beneath this classification, costs are classified according to the function they execute in an organization.  Costs can functionally be clas

Component of fixed overheads variance, Component of Fixed Overheads Var... Component of Fixed Overheads Variance Fixed Overhead Expenditure Variance The fixed overhead expenditure variance is the dissimilarity between the actual fixed expend

How would i calculate the debt amortization, How would I calculate the debt... How would I calculate the debt amortization for a bond issued at discount with a maturity of 12 years, market interest rate at issue 10% annually, 5% semi annually, and has a state

Calculate the rate of learning of initial production phase, Calculate the r... Calculate the rate of learning at which the initial production phase profit target would be achieved, assuming no other cost savings can be made.   Assuming no other cost savi

Decision making cycle, Decision Making Cycle Steps in decision-making ... Decision Making Cycle Steps in decision-making cycle are as: a) Clearly define the objective that is to be the focus of the decision. This is significant in order that the

Find the high future rates of return, Assume your grandparents have just gi... Assume your grandparents have just given you $20,000 on the condition that you invest the money in the stock market. As you contemplate making your investment choices, what accoun

Concepts of cost accounting, concept of cost accounting in an enterprise concept of cost accounting in an enterprise