- Direct material
- Direct labour
- Direct Expenses
- Factory Overhead
- Selling and distribution and admin overhead
2- Cost Behaviour
- Fixed Cost
- Variable Cost
- Mixed Cost
Fixed Cost
Eg: Advertising, Factory Supervision, Factory property tax, Factory Insurance, Depreciation, Leasing Factory, Office salaries
Variable Cost
Eg : Direct Material, Factory direct labour, sales commission, factory indirect material, Office supplies, utiliy.
Mixed Cost
Mixed costs are made up of fixed and variable cost elements. They are combination of semi variable costs and semi fixed costs.
An example of a mixed cost is the earning of a worker who is paid a salary of a RM 1500 per week(fixed) plus a bonus of RM1 for each unit completed (variable). If he increase his weekly output from 1000 unit to 1500 units, his earnings increase from RM 2500 to RM 3000.
(i will upload the figure later)
What is period cost and product cost.
Product Cost
The cost that are included in the cost of manufacturing a product. Total
- Direct material 20,000
- Direct Labour 5000
- Direct Expenses 2000
- Manufacturing Overhead 15,000
- Total (Product Cost) 42,000
Period Cost
Period Cost are the costs which are not identified with product or job and are deducted as expenses during the period in which they are incurred. For example advertising, sales commission, depreciation on office equipment, office supply, office salary, office utility.
To be continue for others Cost related....
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