4. On the basis of nature of cost
The costs associated
with your business’s
product that must be
paid regardless of
how much you sell.
The costs directly
related to the sales
volume of your
business.
Fixed cost
+
Variable cost
5. According to the behavior of costs
Explicit cost Implicit cost
Explicit costs occur when the company pays
for the usage of its factors of production.
Implicit cost refers to the cost of using self-
owned inputs.
6. On the basis of relevance of decision making
Opportunity Cost is the thing that is given
up when given a choice.
Costs incurred in the past cannot be
changed.
7. On the basis of elements of cost
Direct costs Indirect Costs
A price that can be completely attributed to
the production of specific goods or services.
An Indirect costs are not directly accountable to
a cost object(such as a particular project, facility,
function or product).
9. Other Costs
: It is a regularly occurring cost or estimated cost which is
documented with one record – A Recurring cost record.
10. Other costs
: Costs that occur on a one-time basis, and are
unlikely to occur again in the normal course of business.
: It is a cash basis accounting cost recognition process that
classifies costs as they are paid for in cash, and is recognized in the general
ledger at the point of sale.
