Elements of Cost
- Material (Material is a very important part of business)
- Direct material
- Labor
- Direct labor
- Overhead (Variable/Fixed)
- Indirect material
- Indirect labor
- Maintenance & Repair
- Supplies
- Utilities
- Other Variable Expenses
- Salaries
- Occupancy (Rent)
- Depreciation
- Other Fixed Expenses
(In some companies, machine cost is segregated from overhead and reported as a separate element)
They are grouped further based on their functions as,
- Production or works overheads
- Administration overheads
- Selling overheads
- Distribution overheads
Read more about this topic: Cost Accounting
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