Quick Answer: What Are The Elements Of Cost?

What are different types of cost?

Types of CostsFixed Costs (FC) The costs which don’t vary with changing output.

Variable Costs (VC) Costs which depend on the output produced.

Semi-Variable Cost.

Total Costs (TC) = Fixed + Variable Costs.Marginal Costs – Marginal cost is the cost of producing an extra unit..

How will you classify cost?

Classification of Costs. Important classifications of costs include: By nature or traceability: Direct costs and indirect costs. Direct costs are directly attributable/traceable to cost objects, while indirect costs (not being directly attributable) are allocated or apportioned to cost objects.

What do you mean by elements of cost?

The elements of cost are those elements which constitute the cost of manufacture of a product. In a manufacturing organization, we convert raw materials into a finished product with the help of labor and other services. … These services are Material, Labour and Expenses.

What are the main elements of cost?

The Elements of Cost are the three types of product costs (labor, materials and overhead) and period costs.Materials. Materials costs are the tangible goods used in producing the product. … Labor. Wages and salaries paid to employees involved in manufacturing are known as labor costs. … Overhead. … Period Costs.

What are the 4 types of cost?

Following this summary of the different types of costs are some examples of how costs are used in different business applications.Fixed and Variable Costs.Direct and Indirect Costs. … Product and Period Costs. … Other Types of Costs. … Controllable and Uncontrollable Costs— … Out-of-pocket and Sunk Costs—More items…•