Cost Accounting - Elements of Cost

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

Famous quotes containing the words elements of, elements and/or cost:

    “In spite of all their kind some elements of worth
    With difficulty persist here and there on earth.”
    —Hugh MacDiarmid (1892–1978)

    “A party of order or stability, and a party of progress or reform, are both necessary elements of a healthy state of political life.”
    —John Stuart Mill (1806–1873)

    “History is strewn with the wrecks of nations which have gained a little progressiveness at the cost of a great deal of hard manliness, and have thus prepared themselves for destruction as soon as the the movements of the world gave a chance for it.”
    —Walter Bagehot (1826–1877)