-
Kizdar net |
Kizdar net |
Кыздар Нет
RESEARCHCOST: The cost of researching for new or improved products, new applications of materials, or improved methods. DEVELOPMENT COST: The cost of the process which begins with the implementation of a decision to produce a new or improved
Cost objectives are developed to guide the decision makers and to form the bases of classification of cost e.g. manufacturing costs of a product, or direct and indirect costs of a department. There are different measures of costs for different purposes. Therefore, costs …
1. Classification of Cost According to Natural Characteristics: According to this classification, costs are divided into three categories; i.e. Material, labour and other costs. Material: Material is rated as the first element of cost because without material to work upon nothing can be manufactured.
By Nature or Elements or Analytical classification – The costs are divided into 3 categories, Materials, Labour and Expenses. This classification is important as it helps to find out the total cost and how such total cost is constituted and valuation of work-in-progress.
4.3 Classification of cost: Classification of cost is the arrangement of items of costs in logical groups having regard to their nature (subjective classification) and purpose (objective classification).
Cost classification is the process of grouping costs according to their common characteristics. A suitable classification of costs is of vital importance in order to identify the cost with cost centers or cost units. Cost may be classified accounting to their nature, i.e., Material, labor and expenses and a number of other characteristics. The.
Classification of Costs essentially means the grouping of costs according to their similar characteristics. In costing there are a several ways to classify costs as per their nature, functions, traceability etc. Here we will be discussing on various forms of classifications. I. Classification by Nature This is the analytical classification of ...
According to Functional Classification of Costs: •Functional classification of costs defines how the cost was applied (manufacturing, administration or selling). •A functional classification expresses that the business performs various functions for which costs are incurred.
Classification of cost is essential in order to achieve different kinds of objectives such as valuation of inventory, determining total costs, determining price of product/service, costs control. 1. Classification for inventory valuation/profit measurement.
Cost Classification: By Functions (contd..) It represents the cost incurred on making the packed product available to the customer. It consists of the packing cost (meant for facilitating storage and transportation of product), carriage outward, warehousing costs, showroom rent etc. .
- Some results have been removed
Skip to content