Importance of cost classification, Cost Accounting

Importance of Cost Classification

Analysis of cost behaviour is significant to all organizations for effective management. It is since many organizations have a unique cost structure. As an example like, fixed costs account for 60 percent - 80 percent of all hospital costs. Conversely, unlike many organizations of this variety, labour costs largely involve the hospital's fixed costs.

Labour costs not like depreciation need a cash outflow. It is characteristic of labour intensive organizations. On the other hand Capital-intensive organizations, contain low labour costs, as an example like: computerized manufacturing organizations. Some organizations as an example like: hospitals allocate 10 -15 percent of their space for standby emergency events providing them built in idle capacity. This prevents them from enjoying benefits of higher profits such a capital-intensive organization understands at higher volumes beyond the break-even volume. Hence the cost structure of healthcare institutions presents challenges to accountants since of their labour intensive and capital-intensive characteristics.

Posted Date: 2/5/2013 2:45:41 AM | Location : United States

Related Discussions:- Importance of cost classification, Assignment Help, Ask Question on Importance of cost classification, Get Answer, Expert's Help, Importance of cost classification Discussions

Write discussion on Importance of cost classification
Your posts are moderated
Related Questions
Mission Foods produces two flavors of tacos, chicken and fish, with the following characteristics: Chicken Fish Selling price per taco $3.00 $4.50 Variable cost p

Shubenacadie Inc. is currently considering a project with a 5-year life that it believes has the potential to return the company to profitability. Based on the results from a marke

A manufacturing company wants to package its product in a rectangular box with a square base and a volume of 32 cubic inches. The cost of the material used for the top is $.05 squa

Specific Order Costing This is a broad costing system that is applicable where work jobs consist of separate jobs, batches or contracts.  Every job or contract or batch is a c

The Houston Chamber Orchestra presents a series of concerts throughout the year. Budgeted fixed costs total $300,000 for the concert season; variable costs are expected to average

In the beach city of Santa Barbara, California, there are seven bathing suit stores, each with the same schedule of costs and each facing an identical demand curve. Swim N Style is

Hello, I''m currently doing a research on a company and planning an Activity Based Costing system since the company is using Traditional Costing system to allocate the overhead to

how to prepare separate accounts for each process given having been givent normal loss,output,overhead and output passes to next process

The following details were extracted from the standard cost card of a component:       Raw Materials              2.82 Kgs @ Rs.4.80 Kg.     Direct Labour            Type I   6

What is callable preferred stock? Why do corporations issue such stock? Given the different features that are associated with stock (callable, cumulative, preferred, etc.), what ty