Elements of cost

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By: drgan (48 month(s) ago)

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COST ANALYSIS &ELEMENTS OF COST : 

COST ANALYSIS &ELEMENTS OF COST

Slide 2: 

Classification Of Cost According to…….. Nature Function Identifiably Behavior Association With Products Controllability Normality Time Relevance Other Costs

Slide 3: 

Classification Of Cost According To Nature Or Elements Materials Cost Labour Cost Expenses

MATERIAL COST : 

MATERIAL COST

DIRECT MATERIAL COST : 

DIRECT MATERIAL COST IT IS A COST OF MATERIALS WHICH ENTER INTO & FORM PART OF PRODUCT e.g. - timber in furniture – making - clay in brick making

INDIRECT MATERIAL COST : 

INDIRECT MATERIAL COST IT IS THE COST OF MATERIAL WHICH DO NOT FORM THE PART OF PRODUCT BUT WHICH HELP THE PRODUCTION e.g LUBRICATING OIL , FUEL etc. Small items like thread, gum , nails etc Though forms part of product but difficult to calculate cost per unit of that material ----so consider as direct material

LABOUR COST : 

LABOUR COST

Labour cost : 

Labour cost “The labour cost is the cost of remuneration of the employees of an undertaking.” such as Wages, salaries, commissions, bonus, etc. There are two types of labour cost are Direct Labour cost Indirect Labour cost

EXPENSE COST : 

EXPENSE COST

Expenses cost : 

Expenses cost “The cost of services provided to an undertaking and the notional cost of the use of owned assets.” Expenses are two types Direct Expenses Indirect Expenses

OVERHEADS : 

OVERHEADS

Overheads : 

Overheads “The aggregate of Indirect material cost, Indirect wages and Indirect expenses” Three types such as Indirect material cost Indirect labour cost Indirect expenses

Indirect expenses overheads : 

Indirect expenses overheads Factory overheads Office & administration overheads Selling & distribution overheads

Elements of cost : 

Elements of cost Prime cost Overheads Direct Direct Direct Material labour expenses Indirect Indirect Indirect Material Labour Expenses Factory Office & Selling & distribution Overheads administration overheads o overheads