Organizational Behaviour
Cost
Definition:
A actual amount that has to be paid or given up in order to get some thing.
In business cost is usually a monitory valuation of * Effort * Material * Resources * Time * Utilities consumed * Risk incurred * Opportunity foregone in a product. * Delivery of goods or services. * All expenses and cost
Classification of cost Purpose of classification | classification | Preparing External Financial statements | Product classification (Inventoriable),manufacturing cost: * Direct material. * Direct labor. * Manufacture overhead.Period Cost (Expensed)Non-manufacturing Cost: * Selling Cost. * Administrative cost. | Predicting cost behavior in response to change in activities. | * Variable Cost (Proportional to activity). * Fixed Cost (Constant in total). * Semi Variable Cost. | Assigning cost to cost object such to changes in activity. | * Direct Cost (can be easily traced). * Indirect Cost (can not be easily traced). | Making Decision | * Differential Cost (differs between alternatives). * Sunk Cost (Past cost not affected by a decision). * Opportunity Cost (Forgone Cost). | Controllability | * Controllable Cost. * Uncontrollable Cost. | Classify time | * Historical Cost. * Standard Cost. | Other Cost | * Prime Cost. * Conversion Cost. | Cost of Quality. | * Prevention Cost. * Appraisal Cost. * Internal failure cost. * External failure Cost. |
1: purpose for cost classification cost is preparing External Financial statements
Preparing Financial statements are divided into two parts
1: product cost
2: period cost.
1: product cost:
Product cost is the cost of direct labor is consumed to create a product. Product cost can also be considered the cost of the labor required to deliver service to a customer. Product cost is also called manufacturing cost and Inventoriable because it record in the balance sheet.
Product costs are further
Definition:
A actual amount that has to be paid or given up in order to get some thing.
In business cost is usually a monitory valuation of * Effort * Material * Resources * Time * Utilities consumed * Risk incurred * Opportunity foregone in a product. * Delivery of goods or services. * All expenses and cost
Classification of cost Purpose of classification | classification | Preparing External Financial statements | Product classification (Inventoriable),manufacturing cost: * Direct material. * Direct labor. * Manufacture overhead.Period Cost (Expensed)Non-manufacturing Cost: * Selling Cost. * Administrative cost. | Predicting cost behavior in response to change in activities. | * Variable Cost (Proportional to activity). * Fixed Cost (Constant in total). * Semi Variable Cost. | Assigning cost to cost object such to changes in activity. | * Direct Cost (can be easily traced). * Indirect Cost (can not be easily traced). | Making Decision | * Differential Cost (differs between alternatives). * Sunk Cost (Past cost not affected by a decision). * Opportunity Cost (Forgone Cost). | Controllability | * Controllable Cost. * Uncontrollable Cost. | Classify time | * Historical Cost. * Standard Cost. | Other Cost | * Prime Cost. * Conversion Cost. | Cost of Quality. | * Prevention Cost. * Appraisal Cost. * Internal failure cost. * External failure Cost. |
1: purpose for cost classification cost is preparing External Financial statements
Preparing Financial statements are divided into two parts
1: product cost
2: period cost.
1: product cost:
Product cost is the cost of direct labor is consumed to create a product. Product cost can also be considered the cost of the labor required to deliver service to a customer. Product cost is also called manufacturing cost and Inventoriable because it record in the balance sheet.
Product costs are further