Marginal Cost
Marginal Cost is the additional cost that is incurred for producing one additional unit of product. One of the classifications of cost divides all cost between fixed, semi-variable and …
Costing Terms
Cost, Costing, Cost Accounting and Cost Accountancy
Cost, costing, cost accounting and cost accountancy are normally used interchangeably but they are not synonyms of each other. The meaning of these terms is related and similar but …
Classification of Costs based on Functions / Activities
Costs can be classified based on functions or activities in an organization. All the costs of a business can be classified into production costs, administration costs, finance costs, selling …
Material, Labor and Expenses – Classification Based on Nature of Costs
The material, labor and expenses is the common way of classifying costs of any manufacturing business based on the nature of cost. All the costs incurred can be classified …
Types of Costs and their Basis of Classification
Cost classification can be done in various ways depending on its nature and a specific purpose. There are various types of costs classified into logical groupings. These groups are …
Inventoriable and Period Costs
Inventoriable and period costs are also a type of classifications of costs. Inventoriable costs can be defined as costs which become part of inventories such as raw material, work …
Relationship of Direct & Indirect Costs with Fixed & Variable Costs
The relationship of direct & indirect costs with fixed & variable costs is a very crucial concept to understand for doing a real interpretation of costs in any manufacturing …
Cost Drivers
In simple terms, cost driver can be defined as the driver of cost. Just like a driver drives the car, cost driver drives the cost. Cost driver has a …
Variable and Fixed Costs
Variable Costs and Fixed Costs are a type of classification of costs based on their behavior pattern in relation to volume or activity of the business. In short, total …
Direct and Indirect Costs
Understanding the concept of direct and indirect cost is very important from the viewpoint of assignment of various costs to a product or products (the cost objects). Most important …