This document classifies costs in several ways:
1. By nature - material, labor, expenses
2. By function - production, selling, distribution, administrative
3. By identifiability - direct, indirect
4. By variability - fixed, variable, semi-variable, step
5. By controllability - controllable, uncontrollable
It also discusses other cost classifications such as product vs period costs, relevant vs irrelevant costs, normal vs abnormal costs, and more. The document provides definitions and examples for each cost classification.
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Cost accounting is the process of tracking and recording costs associated with manufacturing or producing goods and services. It helps management make informed business decisions and set prices through cost analysis and control. The key objectives of cost accounting are to determine the actual cost of products, identify inefficiencies, provide cost comparisons, and analyze trends to help set production policies and programs. Maintaining an effective cost accounting system provides businesses with valuable information for activities like profitability analysis, inventory valuation, budgeting, and financial reporting.
This document discusses overhead costs and their accounting treatment. It defines overheads as indirect costs that cannot be directly attributed to a specific cost object. The document outlines the key steps in overhead accounting: classification of overheads, codification and collection, allocation and apportionment to cost centers, and absorption into product costs. It provides examples of different bases for classifying, allocating, and apportioning overheads. The document also discusses reapportioning service department costs to production departments through various secondary distribution methods like repeated distribution and trial and error.
Overhead refers to indirect costs that cannot be directly traced to a specific product or service. These include indirect materials, indirect labor, and indirect expenses. Overheads are classified based on their function, elements, and behavior as fixed, variable, or semi-variable. Proper classification of overheads is important for effective cost control, decision making, determining selling prices, conducting cost-volume-profit analysis, budgeting, and overhead absorption.
The document provides information on cost sheets, including their purpose and key components. A cost sheet shows the costs of production for an accounting period and breaks down total costs. It includes prime costs like direct materials, labor, and expenses. Factory costs incorporate prime costs and factory overheads. Administration costs add office overheads to factory costs. Selling and distribution costs include advertising, sales salaries, and transport costs. An example cost sheet is provided with sales, inventory, production, overhead, and expense figures.
Overheads and classifcation of overheads geetarajan73
This document discusses different ways to classify overhead costs. It defines overhead costs as expenses that cannot be directly traced to a specific unit of output. It then describes four main ways to classify overheads:
1. Function-wise classification divides overheads into factory, administration, selling, and distribution overheads.
2. Element-wise classification separates overheads into indirect materials, indirect labor, and indirect expenses.
3. Variability-wise classification categorizes overheads as fixed, variable, or semi-variable based on their relationship to production volume.
4. Control-wise classification distinguishes between controllable and uncontrollable overheads based on whether management can control them.
The document provides
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Cost accounting is the process of tracking and recording costs associated with manufacturing or producing goods and services. It helps management make informed business decisions and set prices through cost analysis and control. The key objectives of cost accounting are to determine the actual cost of products, identify inefficiencies, provide cost comparisons, and analyze trends to help set production policies and programs. Maintaining an effective cost accounting system provides businesses with valuable information for activities like profitability analysis, inventory valuation, budgeting, and financial reporting.
This document discusses overhead costs and their accounting treatment. It defines overheads as indirect costs that cannot be directly attributed to a specific cost object. The document outlines the key steps in overhead accounting: classification of overheads, codification and collection, allocation and apportionment to cost centers, and absorption into product costs. It provides examples of different bases for classifying, allocating, and apportioning overheads. The document also discusses reapportioning service department costs to production departments through various secondary distribution methods like repeated distribution and trial and error.
Overhead refers to indirect costs that cannot be directly traced to a specific product or service. These include indirect materials, indirect labor, and indirect expenses. Overheads are classified based on their function, elements, and behavior as fixed, variable, or semi-variable. Proper classification of overheads is important for effective cost control, decision making, determining selling prices, conducting cost-volume-profit analysis, budgeting, and overhead absorption.
The document provides information on cost sheets, including their purpose and key components. A cost sheet shows the costs of production for an accounting period and breaks down total costs. It includes prime costs like direct materials, labor, and expenses. Factory costs incorporate prime costs and factory overheads. Administration costs add office overheads to factory costs. Selling and distribution costs include advertising, sales salaries, and transport costs. An example cost sheet is provided with sales, inventory, production, overhead, and expense figures.
Overheads and classifcation of overheads geetarajan73
This document discusses different ways to classify overhead costs. It defines overhead costs as expenses that cannot be directly traced to a specific unit of output. It then describes four main ways to classify overheads:
1. Function-wise classification divides overheads into factory, administration, selling, and distribution overheads.
2. Element-wise classification separates overheads into indirect materials, indirect labor, and indirect expenses.
3. Variability-wise classification categorizes overheads as fixed, variable, or semi-variable based on their relationship to production volume.
4. Control-wise classification distinguishes between controllable and uncontrollable overheads based on whether management can control them.
The document provides
This document discusses labour cost accounting. It defines direct and indirect labour costs and explains they are a significant production cost. The purposes of labour cost accounting are for wages calculation, financial reporting, management decisions, and control. Labour costs include basic wages, overtime, idle time, and labour turnover. Remuneration methods comprise fixed salaries, time-based pay, and piecework. Idle time and labour turnover are also defined.
This document classifies and defines different types of costs that are relevant for accounting and business analysis. It discusses six main classifications of costs: 1) elements (material, labor, expenses), 2) functions (factory, administration, selling & distribution, R&D), 3) identifiability (direct, indirect), 4) behavior (fixed, variable, semi-variable), 5) controllability (controllable, uncontrollable), and 6) normality (normal, abnormal). For each classification, examples are provided to illustrate the different cost categories.
This document discusses various aspects of labour cost, including direct labour, indirect labour, labour turnover, and idle time. Direct labour refers to workers who directly produce goods, while indirect labour provides supporting functions. Labour turnover measures the rate at which workers leave and are replaced. Idle time represents time workers are paid for but do not spend on production, which can be normal or abnormal depending on its controllability. The document also covers topics like casual workers, out-workers, and overtime pay.
Absorption Costing and Marginal Costing pptVaseemParry
Marginal costing and absorption costing are two different costing methods. Absorption costing treats all manufacturing costs, including both fixed and variable costs, as product costs. Marginal costing only treats variable manufacturing costs as product costs and treats fixed costs as period costs. Absorption costing results in higher inventory valuations as it includes fixed overhead costs in product costs. Marginal costing is useful for decision making as it focuses only on variable costs relevant to production changes. While marginal costing is simpler, absorption costing follows accounting standards by fully allocating costs.
The document discusses the concept of cost and various types of costs from the perspective of the theory of cost. It defines cost and explains opportunity cost versus actual cost. It then outlines 10 main types of costs including direct vs indirect costs, fixed vs variable costs, sunk vs incremental costs, and historical vs replacement costs. The document also discusses cost functions and how factors like output, scale, input prices, and technology influence the cost-output relationship in the short-run. Graphs and examples are provided to illustrate short-run total, average and marginal costs.
Overhead costs are indirect expenses that are incurred in addition to direct material and direct labor costs. They include indirect materials, indirect labor, and indirect expenses. Overheads must be classified, collected, allocated to cost centers, and then absorbed or charged to production units. They are classified as factory, office/administrative, or selling/distribution overheads. Overhead allocation involves allotting whole costs to cost centers, while apportionment involves allotting proportionate shares of common costs between cost centers. Absorption of overheads involves charging production with an equitable share of overhead costs using an absorption rate.
This document provides an overview of marginal costing and cost-volume-profit (CVP) analysis. It defines key terms like marginal cost, contribution, fixed and variable costs. It explains the differences between marginal and absorption costing approaches. The objectives and concepts of CVP analysis are outlined, including break-even point, margin of safety, contribution ratio and angle of incidence. Formulas for calculating items like break-even sales, break-even point and composite break-even point are presented. Advantages and limitations of marginal costing are listed.
This document defines key concepts in cost accounting and cost management. It discusses how cost accounting provides information for both management and financial accounting by measuring and reporting costs. It also describes different types of costs like direct, indirect, fixed and variable costs. Finally, it summarizes standard costing and analysis of variance, which are techniques used to evaluate actual performance against pre-established cost standards.
The document discusses various methods and concepts in cost accounting, including:
1. Different types of costing methods like unit costing, job costing, contract costing, batch costing, operating costing, process costing, and multiple/uniform costing.
2. The need to reconcile cost and financial accounts when they are maintained separately, to check for differences in reported profit/loss.
3. Key aspects of cost sheets like classifying cost components, ascertaining product costs, fixing selling prices, and aiding cost control and management decisions.
The document discusses job costing and batch costing. It defines job costing as a method where cost is compiled for specific jobs or work orders, rather than for stock. Cost is charged directly to jobs for materials, labor, and expenses. Overhead is apportioned to jobs based on department rates. Batch costing determines cost per unit by dividing total batch costs by the number of units in a batch. The document also discusses determining economic batch quantity to minimize setup and carrying costs, and provides examples of job and batch costing applications.
- Process costing is used to determine average costs for standardized goods produced through continuous processes. It involves allocating costs for multiple processes to the finished goods.
- The key steps are: recording costs by process, calculating production quantities, determining normal losses, and allocating costs between processes and finished goods using weighted average or FIFO methods.
- Process costing is common in industries like manufacturing, mining, chemicals where standardized goods are produced through sequential processes and normal losses are inherent.
* Beginning raw materials inventory: $32,000
* Raw materials purchased: $276,000
* Ending raw materials inventory: $28,000
* Raw materials available for use: $32,000 + $276,000 = $308,000
* Raw materials used: Raw materials available - Ending inventory = $308,000 - $28,000 = $280,000
The cost of direct material used is $280,000.
The answer is C.
material was still present. What is the cost of
direct material used?
A. $276,000
B. $272,000
C. $280,000
D. $ 2
This document defines and provides examples of different types of costs that can be classified in various ways for accounting and management purposes. It discusses costs classified by nature (material, labor, expenses), functions (production, selling, distribution, etc.), identifiability (direct, indirect), variability (fixed, variable, step), controllability (controllable, uncontrollable), normality (normal, abnormal), and more. Key points covered include definitions of direct costs, indirect costs, fixed costs, variable costs, product costs, period costs, and common/joint costs.
This document defines key cost accounting terms and concepts. It discusses that cost is the monetary value of all resources sacrificed to achieve an objective. There are three major elements of cost: materials, labor, and expenses. Costs are further broken down into direct and indirect costs. Direct costs can be traced to a specific cost object, while indirect costs cannot. The document also outlines different levels of costs including prime cost, factory cost, cost of production, and cost of sales. It provides manufacturing companies as an example, detailing the various costs that make up each level.
The document discusses cost sheets, which break down the total costs of producing a product into various components. It explains that cost sheets are used to determine accurate product costs, fix selling prices, compare costs over time for cost control, and help with decision making. The document then defines different types of costs like fixed, variable, operating, and direct costs. It also outlines the components that make up total cost, such as prime cost, factory cost, office cost, and discusses how to calculate costs like material consumed. Finally, it provides an example of the information needed to prepare a cost sheet statement.
Elements of Cost: Classification of Cost:element wise classification :function wise classification :behavior wise classification: Managerial decision making classification
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
This document provides an introduction to costing and pricing concepts. It defines various types of costs, including direct and indirect costs, fixed and variable costs, as well as classifications such as by nature, function, variability and normality. Key points covered include:
- Costs represent the monetary value of resources consumed in production and delivery of goods or services.
- Costs are classified in several ways, including by nature (material, labor, expenses), function (production, selling, distribution), and variability (fixed, variable, step).
- Direct costs are easily traceable to a specific product or service, while indirect costs are shared across multiple products or services.
- Understanding different cost classifications helps with business decision making
The document discusses various ways that costs can be classified, including by nature (material, labor, expenses), function (production, selling, distribution, etc.), identifiability (direct, indirect), variability (fixed, variable, semi-variable, step), controllability, normality, and other classifications. It provides examples and definitions for each classification of costs.
This document discusses labour cost accounting. It defines direct and indirect labour costs and explains they are a significant production cost. The purposes of labour cost accounting are for wages calculation, financial reporting, management decisions, and control. Labour costs include basic wages, overtime, idle time, and labour turnover. Remuneration methods comprise fixed salaries, time-based pay, and piecework. Idle time and labour turnover are also defined.
This document classifies and defines different types of costs that are relevant for accounting and business analysis. It discusses six main classifications of costs: 1) elements (material, labor, expenses), 2) functions (factory, administration, selling & distribution, R&D), 3) identifiability (direct, indirect), 4) behavior (fixed, variable, semi-variable), 5) controllability (controllable, uncontrollable), and 6) normality (normal, abnormal). For each classification, examples are provided to illustrate the different cost categories.
This document discusses various aspects of labour cost, including direct labour, indirect labour, labour turnover, and idle time. Direct labour refers to workers who directly produce goods, while indirect labour provides supporting functions. Labour turnover measures the rate at which workers leave and are replaced. Idle time represents time workers are paid for but do not spend on production, which can be normal or abnormal depending on its controllability. The document also covers topics like casual workers, out-workers, and overtime pay.
Absorption Costing and Marginal Costing pptVaseemParry
Marginal costing and absorption costing are two different costing methods. Absorption costing treats all manufacturing costs, including both fixed and variable costs, as product costs. Marginal costing only treats variable manufacturing costs as product costs and treats fixed costs as period costs. Absorption costing results in higher inventory valuations as it includes fixed overhead costs in product costs. Marginal costing is useful for decision making as it focuses only on variable costs relevant to production changes. While marginal costing is simpler, absorption costing follows accounting standards by fully allocating costs.
The document discusses the concept of cost and various types of costs from the perspective of the theory of cost. It defines cost and explains opportunity cost versus actual cost. It then outlines 10 main types of costs including direct vs indirect costs, fixed vs variable costs, sunk vs incremental costs, and historical vs replacement costs. The document also discusses cost functions and how factors like output, scale, input prices, and technology influence the cost-output relationship in the short-run. Graphs and examples are provided to illustrate short-run total, average and marginal costs.
Overhead costs are indirect expenses that are incurred in addition to direct material and direct labor costs. They include indirect materials, indirect labor, and indirect expenses. Overheads must be classified, collected, allocated to cost centers, and then absorbed or charged to production units. They are classified as factory, office/administrative, or selling/distribution overheads. Overhead allocation involves allotting whole costs to cost centers, while apportionment involves allotting proportionate shares of common costs between cost centers. Absorption of overheads involves charging production with an equitable share of overhead costs using an absorption rate.
This document provides an overview of marginal costing and cost-volume-profit (CVP) analysis. It defines key terms like marginal cost, contribution, fixed and variable costs. It explains the differences between marginal and absorption costing approaches. The objectives and concepts of CVP analysis are outlined, including break-even point, margin of safety, contribution ratio and angle of incidence. Formulas for calculating items like break-even sales, break-even point and composite break-even point are presented. Advantages and limitations of marginal costing are listed.
This document defines key concepts in cost accounting and cost management. It discusses how cost accounting provides information for both management and financial accounting by measuring and reporting costs. It also describes different types of costs like direct, indirect, fixed and variable costs. Finally, it summarizes standard costing and analysis of variance, which are techniques used to evaluate actual performance against pre-established cost standards.
The document discusses various methods and concepts in cost accounting, including:
1. Different types of costing methods like unit costing, job costing, contract costing, batch costing, operating costing, process costing, and multiple/uniform costing.
2. The need to reconcile cost and financial accounts when they are maintained separately, to check for differences in reported profit/loss.
3. Key aspects of cost sheets like classifying cost components, ascertaining product costs, fixing selling prices, and aiding cost control and management decisions.
The document discusses job costing and batch costing. It defines job costing as a method where cost is compiled for specific jobs or work orders, rather than for stock. Cost is charged directly to jobs for materials, labor, and expenses. Overhead is apportioned to jobs based on department rates. Batch costing determines cost per unit by dividing total batch costs by the number of units in a batch. The document also discusses determining economic batch quantity to minimize setup and carrying costs, and provides examples of job and batch costing applications.
- Process costing is used to determine average costs for standardized goods produced through continuous processes. It involves allocating costs for multiple processes to the finished goods.
- The key steps are: recording costs by process, calculating production quantities, determining normal losses, and allocating costs between processes and finished goods using weighted average or FIFO methods.
- Process costing is common in industries like manufacturing, mining, chemicals where standardized goods are produced through sequential processes and normal losses are inherent.
* Beginning raw materials inventory: $32,000
* Raw materials purchased: $276,000
* Ending raw materials inventory: $28,000
* Raw materials available for use: $32,000 + $276,000 = $308,000
* Raw materials used: Raw materials available - Ending inventory = $308,000 - $28,000 = $280,000
The cost of direct material used is $280,000.
The answer is C.
material was still present. What is the cost of
direct material used?
A. $276,000
B. $272,000
C. $280,000
D. $ 2
This document defines and provides examples of different types of costs that can be classified in various ways for accounting and management purposes. It discusses costs classified by nature (material, labor, expenses), functions (production, selling, distribution, etc.), identifiability (direct, indirect), variability (fixed, variable, step), controllability (controllable, uncontrollable), normality (normal, abnormal), and more. Key points covered include definitions of direct costs, indirect costs, fixed costs, variable costs, product costs, period costs, and common/joint costs.
This document defines key cost accounting terms and concepts. It discusses that cost is the monetary value of all resources sacrificed to achieve an objective. There are three major elements of cost: materials, labor, and expenses. Costs are further broken down into direct and indirect costs. Direct costs can be traced to a specific cost object, while indirect costs cannot. The document also outlines different levels of costs including prime cost, factory cost, cost of production, and cost of sales. It provides manufacturing companies as an example, detailing the various costs that make up each level.
The document discusses cost sheets, which break down the total costs of producing a product into various components. It explains that cost sheets are used to determine accurate product costs, fix selling prices, compare costs over time for cost control, and help with decision making. The document then defines different types of costs like fixed, variable, operating, and direct costs. It also outlines the components that make up total cost, such as prime cost, factory cost, office cost, and discusses how to calculate costs like material consumed. Finally, it provides an example of the information needed to prepare a cost sheet statement.
Elements of Cost: Classification of Cost:element wise classification :function wise classification :behavior wise classification: Managerial decision making classification
A power point presentation describing some basic definitions, father of cost accounting, Indian aspect of cost accounting and Various Methods and Techniques of costing.
Presented by: Aquib Ali, Ajay Gupta and Ashwin Showi. (M.Com students)
at the Bhopal School of Social Sciences(BSSS) on 6 September, 2017
This document provides an introduction to costing and pricing concepts. It defines various types of costs, including direct and indirect costs, fixed and variable costs, as well as classifications such as by nature, function, variability and normality. Key points covered include:
- Costs represent the monetary value of resources consumed in production and delivery of goods or services.
- Costs are classified in several ways, including by nature (material, labor, expenses), function (production, selling, distribution), and variability (fixed, variable, step).
- Direct costs are easily traceable to a specific product or service, while indirect costs are shared across multiple products or services.
- Understanding different cost classifications helps with business decision making
The document discusses various ways that costs can be classified, including by nature (material, labor, expenses), function (production, selling, distribution, etc.), identifiability (direct, indirect), variability (fixed, variable, semi-variable, step), controllability, normality, and other classifications. It provides examples and definitions for each classification of costs.
The document discusses various classifications and procedures related to costing. It defines key costing terms like variable costs, fixed costs, direct costs, indirect costs, product costs, period costs, relevant costs, and more. Costs are classified based on their behavior, traceability, purpose, and controllability. The elements of cost - material, labor, and expenses - are also categorized as direct or indirect. Procedures for determining costs include identifying cost elements, classifying costs, and allocating common/indirect costs to arrive at the total cost of cost objects.
UNIT - IV: COST CONCEPTS: Classification of costs - Direct and Indirect expenses- Cost
Sheet - Unit Costing - Job Costing - Mechanics & Application of Marginal Costing in terms of
cost control - Profit Planning - concept of CVP relationship; BEP and their applications.
Ppt on Cost accounting and its classifications Susheel Tiwari
Cost accounting involves classifying costs according to their nature, function, variability, and controllability. There are several types of costs:
- Direct costs like materials and labor that are clearly traceable to production. Indirect costs like utilities that are not directly traceable.
- Fixed costs that do not vary with production like rent. Variable costs that vary with production like materials. Semi-variable costs that vary but not proportionately.
- Controllable costs a manager can influence like direct labor. Uncontrollable costs outside a manager's control like depreciation.
- Normal costs incurred during regular operations. Abnormal costs from unexpected events like fires.
Costs can be classified in various ways for different purposes. Some key classifications are fixed vs variable costs, product vs period costs, direct vs indirect costs, and relevant vs irrelevant costs. Costs are also classified as controllable vs uncontrollable, avoidable vs unavoidable, and traceable vs common costs. Opportunity cost and differential/incremental costs are important concepts in decision making.
Cost accounting is the process of determining the cost of products or services. It involves recording income and expenditures and preparing periodic reports and statements to ascertain and control costs. The objectives of cost accounting include determining selling prices, controlling costs, providing information for decision-making, ascertaining costs and profits, and facilitating the preparation of financial statements. Cost accounting helps management, employees, consumers, creditors, and supports business policies, budgeting, and ensuring optimal use of resources. However, cost accounting lacks uniform procedures and can be expensive to implement.
This document provides an overview of costing concepts and techniques discussed across 17 chapters. It includes definitions of key costing terms like cost, costing, cost accounting and objectives of cost accounting. It also discusses various classifications of costs such as historical vs current costs, variable vs fixed costs, direct vs indirect costs, and relevant vs irrelevant costs. Specific costing techniques covered include standard costing, activity-based costing, target costing and life cycle costing. The document concludes with a discussion of budgetary control.
This document discusses various cost concepts including cost methods, cost techniques, costing systems, cost classification, and elements of cost. It defines different types of costs such as fixed costs, variable costs, semi-variable costs, normal costs, abnormal costs, controllable costs, uncontrollable costs, relevant costs, and irrelevant costs. It also discusses inventoriable costs versus period costs.
This document discusses various types of costs and expenses involved in apparel manufacturing including production costs, purchasing costs, administration costs, and standard cost sheets. It outlines 13 types of costs including fixed costs, variable costs, semi-variable costs, research costs, and more. Production costs are categorized as raw material costs, direct labor costs, and factory overhead. Methods to control costs such as improving fabric utilization and productivity are also presented.
Cost accounting was developed due to limitations of financial accounting such as only providing past data, not showing profit/loss by product or process, and not measuring organizational efficiency. Cost accounting measures the resources consumed to produce products/services. It involves determining, controlling, and reducing costs to guide business decisions. Costs are classified by functions, behavior, identification, time period, and decisions to aid analysis. Cost accounting techniques include standard costing, budgetary control, and differential costing.
The document discusses the limitations of financial accounting that led to the development of cost accounting. It then provides definitions and explanations of key cost accounting concepts and terms including cost, cost centers, cost units, cost classification, costing methods, and elements of cost. Standard costing, budgetary control, and other costing techniques are also introduced. The overall summary is that the document serves as an introduction to cost accounting concepts, terminology, and methodologies.
Cost analysis refers to the study of how costs behave in relation to factors like output size, scale of operations, input prices, and technology. Cost is influenced by the size of the plant, with larger plants enjoying economies of scale. Cost also depends on output level, input prices, labor issues, technology, and managerial efficiency. Understanding different cost concepts is important for business decision making. Costs can be classified as fixed, variable, historical, replacement, explicit, implicit, avoidable, unavoidable, controllable, uncontrollable, and more.
- Cost analysis deals with the behavior of costs in relation to factors like output, scale of operations, input prices, and technology.
- Costs are classified as fixed and variable. Fixed costs remain constant while variable costs change with output.
- The cost-output relationship and break-even point are important for determining the optimal production level and profitability.
- Break-even analysis identifies the minimum sales needed to cover total costs. It helps managers with cost control, pricing, and other decisions.
This document provides an analysis of costs and revenues. It defines and explains various cost concepts including actual and opportunity costs, fixed and variable costs, as well as average, marginal, and total costs. Cost behavior in the short-run and long-run is examined. Revenue concepts such as total, average, and marginal revenue are also introduced. Learning curves and cost functions are discussed. The importance of understanding costs for business decision making is emphasized.
The document discusses the classification of labour costs and overheads. It defines direct labour costs as costs that can be directly attributed to a specific product or process. Indirect labour costs are costs that cannot be directly attributed and are related to supporting functions. Overheads are classified functionally into production, administration, selling and distribution overheads. They are also classified behaviorally into fixed, variable and semi-variable overheads. The document outlines the process of collecting, classifying and allocating overheads to arrive at the total cost of production.
The document discusses different ways to classify costs for accounting and management purposes. There are several important classifications: (1) according to function such as manufacturing, administration, selling; (2) based on behavior as variable, fixed, or semi-variable; (3) as product or period costs; (4) as direct or indirect with respect to identification with cost units; (5) as controllable or uncontrollable; and (6) according to elements of material, labor, and expenses. Proper classification of costs is important for accurate cost ascertainment and determination of profit.
This document discusses different concepts of cost accounting including costs related to income measurement, profit planning, control, and decision making. It defines key costing terms like product costs, period costs, fixed costs, variable costs, relevant and irrelevant costs, incremental and differential costs, opportunity costs, and imputed costs. The overall purpose is to explain how costs are classified and used for different accounting and business objectives.
This powerpoint presentation is created by Gyanbikash.com for the students of class nine to ten from their accounting NCTB textbook for multimedia class.
Urban rail transit is an all-encompassing term for various types of local rail systems providing passenger service within and around urban or suburban areas. The set of urban rail systems can be roughly subdivided into the following categories, which sometimes overlap because some systems or lines have aspects of multiple types.
urban railway system
railway transportation system
history of railway transportation
importance of railway transportation
railway transportation in ghana
urban rail transport
Benefits of Town Planning. 1. Promotes security. Town planners usually have to consider threats like storm surges and floods when planning resources within a town. Extreme ... 2. Increases attractiveness. Cities are also planned by considering the aesthetics. Planners enhance the attractiveness of a ...
planning in management ppt
benefits ppt template
town planning pdf
project planning ppt
what is town planning
urban planning ppt
project planning and management ppt
sales and operations planning ppt
The National Capital Region (French: Région de la capitale nationale), also referred to as Canada's Capital Region and Ottawa–Gatineau (formerly Ottawa–Hull), is an official federal designation for the Canadian capital of Ottawa, Ontario, the neighbouring city of Gatineau, Quebec, and surrounding urban and rural communities.
georgia regions ppt
types of regions ppt
Concentric Zone Model Theory and Its Limitations. Concentric Zone Model Theory was created by sociologist EW Burgess in 1925. Based on a study of land use patterns and social group in Chicago. City grows outward beginning with the CBD. Similar & functionally related activities will locate at the same distance from CBD.
concentric zone theory paper
concentric zone theory articles
chicago's concentric zone theory
concentric zone model definition
concentric zone theory of crime
concentric zone model example
concentric zone model strengths
concentric zone theory and statistics
places to visit around bangalore
best places to visit bangalore
what to do in bangalore
things to do in bangalore india
famous places in bangalore
tourist attractions in bangalore
places near bangalore for one day trip
weekend getaways from bangalore
Transit Oriented Development is the exciting fast growing trend in creating vibrant, livable, sustainable communities. Also known as TOD, it's the creation of compact, walkable, pedestrian-oriented, mixed-use communities centered around high quality train systems.
transit oriented development california
transit oriented development principles
examples of transit oriented development
transit oriented development abstract
transit oriented development case studies
transit oriented development hawaii
transit oriented development seattle
transit oriented development benefits
Kochi city as an organism
Kochi city as an organism PPT
City as an organismCity as an organism • An organism- Anything that has life; is living • Every city has some characteristics that can be compared to that of a living organism • Some places of a city act as organs of an organism • Some bodies (Legislature, Judiciary, etc.) function like organs of an organism 2 3.
Garden City is an incorporated village in Nassau County, New York, United States, in the town of Hempstead.
city of garden city
garden city idaho
garden city cranston ri
garden city beach rentals
garden city hospital
city of garden city idaho
garden city id real estate
garden city high school
GARDEN CITY PPT
This document discusses subdivision practices and the metro region concept. It provides an introduction to subdivision as a process used by communities to regulate land division. It outlines the advantages of subdivision for managing development and maintaining procedures over time. The document then describes the typical procedure for subdividing land, from surveying to filing maps. Challenges with subdivision include the costs of hazard mapping and requiring code amendments. The document also introduces metro regions as densely populated urban areas consisting of multiple jurisdictions that benefit from concentration. Maximizing potential agglomeration benefits in metro regions includes providing services, transportation, infrastructure and accessibility to firms.
A development plan is an aspect of town and country planning in the United Kingdom comprising a set of documents that set out the local authority's policies and proposals for the development and use of land in their area.
town development plan
child development ppt
people development ppt
human development ppt
language development ppt
implementation plan ppt
curriculum development ppt
project plan ppt template
Let’s take a look at some of the most common Space and Facility Management terms and review what they mean so you can be sure to stay ahead of the curve as you plan moves, manage employees, carry out a successful space inventory and space utilization of the additional space and facilities in your office.
osha underground utilities standard
what utilities service my address
dallas water utilities standard details
dallas water utilities standards
dallas water utilities standard drawings
Precincts are artificially enclosed areas in town planning formed by arterial and sub-arterial roads. They are quiet areas where through traffic is not allowed and all internal roads are strictly local. Each precinct is planned as a distinct residential, business, or industrial unit that connects to adjoining precincts by tunnels or bridges over dividing arterial roads, with buildings not facing those major roads and few connections between precinct roads and sub-arterial roads.
The multiple nuclei model is an economical model created by Chauncy Harris and Edward Ullman in the 1945 article "The Nature of Cities"
the multiple nuclei theory
the multiple nuclei theory quizlet
multiple nuclei model example
multiple nuclei city
multiple nuclei model definition
multiple nuclei model explained
multiple nuclei model description
multiple nuclei model critiques
ROOF COVERINGS FOR PITCHED ROOFS • Roof covering is an essential component of pitched roof, to be placed over the roof frame work to protect it from rain, snow, sun, wind and other atmospheric agency. Various types of roofing materials are available, and their selection depends upon 1)..
Roof and roof coverings ppt
This document discusses zoning and its objectives. Zoning is the process by which a local government allocates land uses and establishes restrictions for things like building heights and densities. The objectives of zoning are to promote the common good, make town planning schemes effective, coordinate public amenities, and control growth. There are different types of zoning like functional, form-based, intensity, and incentive zoning. Zoning aspects covered include density, heights, and use zones like residential, commercial, and industrial. Advantages are listed as promoting health, safety, prosperity, and orderly development.
what is scaffolding formwork - scaffolding formwork those are two important and initial steps that been done at the time of construction. scaffolding and formwork have same importance . there are several scaffolding's and formwork methods. several products etc. | PowerPoint PPT presentation | free to view
port scaffolding & formwork
peri formwork & scaffolding
mgs scaffolding and formworks
peri formwork scaffolding engineering
nippon scaffolding & formworks corp
construction formwork
khk scaffolding & formwork
concrete form scaffolding
Major problems in India. 1. COMPLICATIONS IN INDIA. 2. 2 India has made a place for itself as one of the fastest growing economies in the world, yet it loses behind in a lot behind in the name of growth. As the rich are getting richer and the poor get poorer, the divide has been expanding more than before.
Regional problems and their solutions ppt
Presentation Skills is one of the most important skills for impressing others. There are three key steps involved in making an effective presentation: 1. Planning 2. Preparation 3. Delivery All these can be successfully done through proper preparation and practice. Even the best public speakers adopt these vital steps. ..
good presentation skills powerpoint
presentation skills training powerpoint
advanced presentation skills ppt
effective presentation skills
how to make a great powerpoint presentation
how to make a powerpoint presentation
how to make an effective powerpoint presentation
powerpoint presentation skills
Plastering Defination of plastering : The word “plaster” comes from the Greek language meaning “to daub on”. This is the process of covering rough surfaces with a plastic material to obtain an even, smooth, regular, clean & durable surfaces. On the other hand we say that; A mixture of lime or gypsum, sand and water,...
slideshare ppt download
slideshare presentations
stroke ppt slideshare
download slideshare ppt online
slideshare powerpoint
iot ppt slideshare
Harnessing WebAssembly for Real-time Stateless Streaming PipelinesChristina Lin
Traditionally, dealing with real-time data pipelines has involved significant overhead, even for straightforward tasks like data transformation or masking. However, in this talk, we’ll venture into the dynamic realm of WebAssembly (WASM) and discover how it can revolutionize the creation of stateless streaming pipelines within a Kafka (Redpanda) broker. These pipelines are adept at managing low-latency, high-data-volume scenarios.
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...IJECEIAES
Climate change's impact on the planet forced the United Nations and governments to promote green energies and electric transportation. The deployments of photovoltaic (PV) and electric vehicle (EV) systems gained stronger momentum due to their numerous advantages over fossil fuel types. The advantages go beyond sustainability to reach financial support and stability. The work in this paper introduces the hybrid system between PV and EV to support industrial and commercial plants. This paper covers the theoretical framework of the proposed hybrid system including the required equation to complete the cost analysis when PV and EV are present. In addition, the proposed design diagram which sets the priorities and requirements of the system is presented. The proposed approach allows setup to advance their power stability, especially during power outages. The presented information supports researchers and plant owners to complete the necessary analysis while promoting the deployment of clean energy. The result of a case study that represents a dairy milk farmer supports the theoretical works and highlights its advanced benefits to existing plants. The short return on investment of the proposed approach supports the paper's novelty approach for the sustainable electrical system. In addition, the proposed system allows for an isolated power setup without the need for a transmission line which enhances the safety of the electrical network
Literature Review Basics and Understanding Reference Management.pptxDr Ramhari Poudyal
Three-day training on academic research focuses on analytical tools at United Technical College, supported by the University Grant Commission, Nepal. 24-26 May 2024
Optimizing Gradle Builds - Gradle DPE Tour Berlin 2024Sinan KOZAK
Sinan from the Delivery Hero mobile infrastructure engineering team shares a deep dive into performance acceleration with Gradle build cache optimizations. Sinan shares their journey into solving complex build-cache problems that affect Gradle builds. By understanding the challenges and solutions found in our journey, we aim to demonstrate the possibilities for faster builds. The case study reveals how overlapping outputs and cache misconfigurations led to significant increases in build times, especially as the project scaled up with numerous modules using Paparazzi tests. The journey from diagnosing to defeating cache issues offers invaluable lessons on maintaining cache integrity without sacrificing functionality.
The CBC machine is a common diagnostic tool used by doctors to measure a patient's red blood cell count, white blood cell count and platelet count. The machine uses a small sample of the patient's blood, which is then placed into special tubes and analyzed. The results of the analysis are then displayed on a screen for the doctor to review. The CBC machine is an important tool for diagnosing various conditions, such as anemia, infection and leukemia. It can also help to monitor a patient's response to treatment.
Introduction- e - waste – definition - sources of e-waste– hazardous substances in e-waste - effects of e-waste on environment and human health- need for e-waste management– e-waste handling rules - waste minimization techniques for managing e-waste – recycling of e-waste - disposal treatment methods of e- waste – mechanism of extraction of precious metal from leaching solution-global Scenario of E-waste – E-waste in India- case studies.
Batteries -Introduction – Types of Batteries – discharging and charging of battery - characteristics of battery –battery rating- various tests on battery- – Primary battery: silver button cell- Secondary battery :Ni-Cd battery-modern battery: lithium ion battery-maintenance of batteries-choices of batteries for electric vehicle applications.
Fuel Cells: Introduction- importance and classification of fuel cells - description, principle, components, applications of fuel cells: H2-O2 fuel cell, alkaline fuel cell, molten carbonate fuel cell and direct methanol fuel cells.
3. MATERIALCOST
Cost of materials used for the manufacture of a product,
a particular work order, or provision of a service.
Example: Cloth for making a dress, stores used for
maintaining machines and buildings such as lubricants,
cotton waste, bricks etc.
4. LABOURCOST
Labour cost is defined as the total expenditure
borne by employers in order to employ workers.
direct costs linked toLabour costs include the
remuneration for work carried out such as direct
remuneration, bonuses and ex gratia payments not paid
at each pay period, payments for days not worked,
severance pay, benefits in kind. They also include
indirect costs linked to employees, independently of the
remuneration paid by the employer, such as direct
social benefits, vocational training costs and soon.
5. EXPENSES
Expense is defined as money expended or cost incurred
in a firm's efforts to generate revenue, representing cost
of doing business. They may be in the form of actual
cash payments (such as wages and salaries), a computed
'expired' portion (depreciation) of an asset, or an
amount taken out of the firm's earnings (such as bad
debts).
Whereas all expenses are costs, not all costs (such as
those incurred in acquisition of income generating
assets) are expenses.
7. PRODUCTIONCOST
THE COST OF THE SEQUENCE OF OPERATIONS WHICH
BEGINS WITH SUPPLYING MATERIALS, LABOUR AND
SERVICES AND ENDS WITH PRIMARY PACKING OF THE
PRODUCT. THUS IT INCLUDES THE COST OF DIRECT
MATERIALS, DIRECT LABOUR, DIRECT EXPENSES AND
FACTORY OVERHEADS.
8. SELLINGCOST
THE COST SEEKING TO CREATE AND STIMULATE
DEMAND (SOMETIMES TERMED ‘MARKETING’) AND
OF SECURING ORDERS.
9. DISTRIBUTIONCOST
The cost of the sequence of operations which begins
with making the packed product available for dispatch
and ends with making the reconditioned returned
empty package, if any available forre-use.
It also includes expenditure incurred in transporting
articles to central or local storage as well as in moving
articles to and from prospective customers as in case of
goods on sale or return basis. In gas, electricity and
water industry distribution means pipes, mains and
services which may be regarded as the equivalent of
packing and transportation.
10. ADMINISTRATIVECOST
The cost of formulating the policy, directing the
and controlling the operationsorganization
undertaking
production,
which
selling
is not
& distribution, research
of an
related directly to a
or
development activity or function.
11. RESEARCHCOST
THE COST OF RESEARCHING FOR NEW OR IMPROVED
PRODUCTS, NEW APPLICATIONS OF MATERIALS, OR
IMPROVEDMETHODS.
12. DEVELOPMENTCOST
The cost of the process which
implementation of a decision to
begins with the
produce a new or
improved product or to employ a new or improved
formalmethod and ends with commencement of
production of that product or by that method.
13. PRE-PRODUCTIONCOST
The part of development cost incurred in making a trial
production run preliminary to formal product.
This term is sometimes used to cover all activities prior
to production including Research & Development, but
in such cases the usage should be made clear in the
context
14. CONVERSIONCOST
The sum of direct wages, direct expenses and overhead
cost of converting raw materials to the finished stage or
converting a material from one stage of production to
the next.
In some cases this also includes any excess material cost
or loss of material incurred at the particular stage of
production.
15. PRODUCTCOST
THESE ARE INVENTORIABLE COST. THESE ARE THE COSTS
WHICH ARE ASSIGNED TO THE PRODUCT. UNDER
MARGINAL COSTING VARIABLE MANUFACTURING COST
AND UNDER ABSORPTION COSTING, TOTAL
MANUFACTURING COST CONSTITUTES PRODUCT COST.
17. DIRECTCOST
The expenses on material and labour economically and
considered as direct costs. In the process
easily traceable to a product, service or job are
of
manufacture or production of articles, materials are
purchased, labourers are employed and the wages are
paid to them, certain other expenses are also incurred
directly. Since all these take an active and direct part in
the manufacture of a particular commodity, hence are
called direct costs.
WITH EX:
18. INDIRECTCOST
The expenses incurred on those items which are not
directly chargeable to production are known as indirect
costs. Example: In production, salaries of timekeepers,
storekeepers, foremen are paid, certain expenses for
running the administration are incurred. All of these
cannot be conveniently allocated to production and
hence are called indirect costs.
20. FIXEDCOST
THE COST WHICH DOES NOT VARY BUT REMAINS
CONSTANT WITHIN A GIVEN PERIOD OF TIME AND RANGE
OF ACTIVITY IN SPITE OF THE FLUCTUATIONS IN
PRODUCTION, IS KNOWN AS FIXED COST. EXAMPLE:
RENT, INSURANCE OF FACTORY BUILDINGS ETC. REMAIN
THE SAME FOR DIFFERENT LEVELS OF PRODUCTION.
21. VARIABLECOST
These costs tend to vary with the volume of output.
Any increase in the volume of production results in an
increase in the variable costand vice versa.
Example: cost of material, cost of labouretc.
22. SEMI-VARIABLECOST
The cost which does not vary proportionately but
simultaneously cannot remain stationery at all times is
known as semi variable cost. It can also be called as
semi-fixed cost.
Example: Depreciation, repairs etc.
23. STEPCOSTS
Fixed cost can be further classified into committed fixed
costs and discretionary fixedcosts.
Committed fixed costs are unavoidable in the short
term if the organization has to function. Examples are
depreciation, rent, pay etc,
Discretionary fixed costs are those which are set at a
fixed amount for specific time periods by management .
Examples are research and development costs,
advertisement and market researchexpenses
24. STEPCOSTS
Certain costs remain fixed over a range of activity and
then jump to a new level as activity changes. Such costs
are treated as “StepCosts”.
Example: A foreman is in a position to supervise a given
number of employees. Beyond this number it will be
necessary to hire a second then a third and so on.
26. CONTROLLABLECOSTS
THESE ARE THE COSTS WHICH CAN BE INFLUENCED BY
THE ACTION OF A SPECIFIED MEMBER OF AN
UNDERTAKING. A BUSINESS ORGANIZATION IS USUALLY
DIVIDED INTO A NUMBER OF RESPONSIBILITY CENTRES
AND EACH CENTRE IS HEADED BY AN EXECUTIVE. THE
EXECUTIVE CAN THUS CONTROL THE COSTS INCURRED
IN THAT PARTICULAR RESPONSIBILITY CENTRE.
27. UNCONTROLLABLECOSTS
Costs which cannot be influenced by the action of a
specified member of an undertaking.
Example: Expenditure incurred by the tool room is
controllable by the foreman in charge of that section
but the share of the tool room expenditure which is
apportioned to a machine shop is not to be controlled
by the machine shop foreman
.
29. NORMALCOSTS
It is the cost which is normally incurred at a given level
of output under the conditions in which that level of
output is normally attained.
ABNORMALCOSTS
It is the cost which is not normally incurred at a given
level of output in the conditions in which that level of
output is normally attained.
30. 7.OTHERCOSTS
Product Costs and Period Costs
Decision making Costs and Accounting Costs
Relevant and IrrelevantCosts
Shutdown and SunkCosts
Avoidable / Escapable and Unavoidable / Inescapable
Imputed orHypothetical Costs
Differential, Incremental or Decremental Cost
O u t of Pocket Costs
Opportunity Cost
Traceable, Untraceable Costs
Joint Costs and Common Costs
31. PRODUCTCOSTS
Costs which become part of the cost of the product
rather than an expense of the period in which they are
incurred are called as “Product Costs”. In financial
statements such costs are treated as assets until the
goods they are assigned to are sold. They become an
expense at that time. These costs may be fixed as well as
variable.
Example: Cost of raw materials and direct wages,
depreciation on plant &equipment etc.
32. PERIODCOSTS
Costs which are not associated with production are
called “Period Costs”. They are treated as an expense of
the period in which they are incurred. They may also be
fixed as well as variable. Such costs include General
Administration costs, Salesman salaries and
commission, depreciation on office facilities etc. They
are charged against the revenue of the relevant period.
33. DECISIONMAKINGCOSTS
THESE ARE SPECIAL PURPOSE COSTS THAT ARE
APPLICABLE ONLY IN THE SITUATION IN WHICH THEY
ARE COMPILED. THEY HAVE NO UNIVERSAL
APPLICATION. THEY NEED NOT TIE INTO ROUTINE
FINANCIAL ACCOUNTS. THEY DO NOT AND SHOULD NOT
CONFORM TO THE ACCOUNTING RULES.
34. ACCOUNTINGCOSTS
These costs are compiled primarily from financial
statements. They have to be altered before they can be
used for decision making. Moreover they are historical
costs and show what has happened under an existing
set of circumstances, while decision making costs are
future costs.
Example: Accounting costs may show the cost of the
product when the operations are manual, while
decision making costs might be calculated to show the
costs when theoperations are mechanised.
35. RELEVANT& IRRELEVANTCOST
Relevant costs are those costs which would be changed
by the managerial decision, while irrelevant costs are
those which would not be affected by the decision.
Example: If a manufacturer is considering closing down
of an unprofitable retail sales shop, wages payable to
the workers of the shop are relevant in this connection
since they will disappear on closing down of the shop.
But prepaid rent for the shop or unrecovered costs of
any equipment which will have to be scrapped, will be
irrelevant costs which must beignored.
36. SHUTDOWNCOSTS
A manufacturer or an organization rendering service
may have to suspend its operations for a period on
account of some temporary difficulties such as shortage
of raw materials, non availability of labour etc. During
this period though no work is done yet certain fixed
costs such as rent and insurance of buildings,
depreciation etc. for the entire plant will have to be
incurred. Such costs of the idle plant are known as shut
down costs.
37. SUNKCOSTS
THESE ARE COSTS WHICH HAVE BEEN CREATED BY A
DECISION THAT WAS MADE IN THE PAST THAT CANNOT
BE CHANGED BY ANY DECISION THAT WILL BE MADE IN
THE FUTURE. INVESTMENT IN PLANT & MACHINERY ARE
PRIME EXAMPLES OF SUCH COSTS. SINCE SUNK COSTS
CANNOT BE ALTERED BY LATER DECISIONS, THEY ARE
IRRELEVANT FOR DECISION MAKING.
38. EXAMPLE1
ABC Ltd. Purchased a machine for Rs. 30,000 with an
operating life of 5 years and no scrap value. Soon after
making the purchase the management of ABC Ltd.
Feels that the machine should not have been purchased
since it cannot yield the operating advantage originally
contemplated. It is expected to result in saving in
operating costs of Rs. 18,000 over a period of 5 years.
The machine can be sold immediately for a sum of Rs.
22,000.
39. SOLUTION1
In taking the decision whether the machine should be
sold or be used, the relevant amounts to be compared
are Rs. 18,000 in cost savings over 5 years and Rs. 22,000
that can be realized in case it is immediately disposed
off. Rs. 30,000 invested in the asset is not relevant since
it is the same in both the cases. The amount is the sunk
cost. ABC Ltd. Should therefore sell the machinery for
Rs. 22,000 since it will result in an extra profit of
Rs.4,000 as compared to keeping and using it.
40. AVOIDABLEAND
UNAVOIDABLE
Avoidable costs are those which will be eliminated if a
segment of the business with which they are directly
related is discontinued. Unavoidable costs are those
which will not be eliminated with the segment. Such
costs are merely reallocated if the segment is
discontinued.
Example: In case a product is discontinued, salary of the
factory manager or factory rent cannot be eliminated. It
will simply mean that certain other products will have
to absorb a higher amount of such overheads. However
salary of clerks or bad debts traceable to the product
would be eliminated.
41. DIFFERENTIALCOSTS
The difference in total costs between two alternatives is
termed as ‘differential costs’. In case the choice of an
alternative results in increase in total costs, such
increase in costs is known as ‘incremental costs.’ In
case the choice results in decrease in total costs, such
decrease in total costs is termed as ‘decremental costs’.
While assessing the profitability of a proposed change
the incremental costs are matched with incremental
revenue and vice versa. The proposed change is taken
only when it isprofitable.
42. OUT-OF-POCKETCOST
This means the present or future cash expenditure
regarding a certain decision which varies depending
upon the natureof decision made.
Example: A company has its own trucks for transporting
raw materials and finished products from one place to
another. It seeks to replace these trucks by employment
of public carrier of goods. In making this decision of
course , the depreciation of the trucks is not to be
considered, but the management must take into
account the present expenditure on fuel, salary to
drivers and maintenance. Such costs are termed as out-
of-pocket expenses.
43. OPPORTUNITYCOST
This cost refers to the advantage, in measurable terms,
which has been foregone on account of not using the
facilities in the manner originally planned.
Example: If an owned building is proposed to be
utilized for housing a new project plant, the likely
revenue which the building could fetch if rented out is
the opportunity cost which should be taken into
account while evaluating the profitability of the project.
44. TRACEABLEORUNTRACEABLECOSTS
Costs which can be easily identified with a department,
process or product are termed as traceable costs.
Example: the cost of direct material, direct labour etc.
Costs which cannot be so identified are termed as
untraceable or common costs.
In other words common costs are costs incurred
collectively for a number of cost centres and are to be
suitably apportioned for determining the cost of
individual cost centres. Example: overheads incurred
for a factory as a wholeetc.
45. JOINTCOSTS
These are a sort of common costs. When two or more
products are produced out of one and the same material
or process, the costs of such material or process are
called joint costs.
Example: When cotton seeds and cotton fibre are
produced from the same raw materials, the cost
incurred till split off or separation point will be joint
costs.
46. COMMONCOSTS
Common costs are those which are incurred for more
than one product, job, territory or any other specific
costing unit. They are not capable of being identified
with individual product, and are therefore apportioned
on a suitable basis.
Example: Rent, lighting and supervision costs are
common costs to all departments located in the factory.