Prime Cost – Meaning, Formula, Importance And More
What is Prime Cost?Prime Cost (or Flat Cost or First Cost) in managerial accounting is the direct cost that the company incurs in manufacturing… Read Article
Types of Costs
Fixed Cost – What It Is And What's Its Importance
As the name suggests, fixed cost is an expense that does not change very frequently and is recurring. For instance, a company will have… Read Article
Selling, General and Administrative Expenses – All You Need To Know
Selling, general and administrative expenses (or SG&A) are the total of both direct and indirect selling expenses in addition to the administrative expenses. The… Read Article
Overhead Costs – Types, Importance, and More
What is Overhead a Cost?Overhead are the business costs that are crucial for the day-to-day running of the business, but one can’t attribute these… Read Article
Explicit Vs Implicit Cost
Meaning of Explicit CostCosts resulting in an immediate outflow of cash from the business are termed explicit costs. These costs are incurred during the… Read Article
Relevant Costs
Relevant costs are defined as the costs that arise in the future and are different for different alternatives. The concept of relevant costs is… Read Article
Differential / Incremental Cost
Differential Cost or Incremental Cost is the difference in total relevant cost between two alternatives. These alternatives are ‘make or buy,’ ‘two different levels… Read Article
Classification of Costs based on Functions / Activities
There is the various classification of costs. It could be based on nature, traceability, functions, behavior, purpose, production process, and costs period. In this… Read Article
Material, Labor and Expenses – Classification Based on Nature of Costs
The material, labor, and expenses are the common way of classifying costs of any manufacturing business based on the nature of cost. All the… Read Article
Types of Costs and their Classification
Cost classification can be done in various ways depending on its nature and specific purpose. There are various types of costs classified into logical… Read Article
Inventoriable and Period Costs
Inventoriable and period costs are also a type of classification of costs. Inventoriable costs can be defined as costs that become part of inventories… Read Article