When we are categorize a product according to its cost we need to know what type of cost it is. Here is the details below....
Direct Costs : This costs is directly attached with the product. Few direct costs will create the full costs of a particular product. Here the example will be tyers cost will be direct cast in an automobile company.
Indirect Costs : This cost you will not able to calculate on aspects of a particular product. Actually it is some uncertain costs which is immeasurable like the extra labour cost, damarage costs etc. So, this type of costs will be calculated in aspect of a companies total production not on a particular product or production.
Fixed Cost :This cost is certain. Because while you are going for a production you need to purchase raw materials & For that reason you have fix one charges which is non changeable. Because the raw materials is important to start a production. Example : Glass is a raw material for a mirror factory. So, Costs of glass is fixed cost for that mirror factory.
Variable Costs :This cost is depends on the situation. It may increase or decrease. So, the selling price of a particular product will some extent depends on the variable cost.
Relevant Cost : This is not directly related to the selling price but partially related. If costs are directly related to the production then that is relevant cost.
Irrelevant costs :This is not related to the production but this is also an unseperatable expenses which is called irrelevant costs.
So, these above mention costs will make the total production cost.
No comments:
Post a Comment