What is Cost classification?
What is Cost classification?Concept or pregnant of cost Accounting? in addition to Costing in addition to cost accounting
Cost classification
What is Cost classification?Concept or pregnant of cost Accounting
What is Cost classification?Concept or pregnant of cost Accounting
Introduction
Cost accounting involves collecting, classifying, recording in addition to appropriate allotment of expenditures for determining the cost of products or services. Costs pick out unlike features or characteristics. For proper command in addition to managerial decisions, direction is to live provided wit
h necessary information to analyst in addition to form costs. costs are classified according to their mutual characteristics. The physical care for of grouping costs according to their mutual characteristic is known every bit "classification of cost". For this purpose, the full cost is classified on the footing of production in addition to process, elements of cost, faction, behaviors, controllability etc.
Concept or pregnant of cost
The term "cost" has a diversity of interpretations inwards mutual use. In ordinary language, it may hateful price. The oxford lexicon defines "cost" every bit the toll paid for something. But inwards cost accounting. It is considered unlike from price.
In cost accounting, cost is the amount of resources given upwards inwards exchanges for to a greater extent than or less goods or services. The resources given upwards are to a greater extent than often than non inwards terms of coin of if non inwards term of money; they are ever expressed inwards monetary units. It consists of all the expenses incurred inwards producing a commodity or exciting a contract. If signified or monetary outlay to secure to a greater extent than or less benefit.
The term 'cost' itself has no important meaning, therefore, it is ever used alongside an describing word or phrase that conveys the pregnant intended, such every bit prime, direct, indirect, fixed, variable, controllable, opportunity, marginal, replacement in addition to the like. Such description implies a sure enough characteristic, which is of import inwards computing in addition to analyzing the cost.
"Cost may live defined every bit the sacrifice or giving upwards resources for a exceptional purpose. Cost is ofttimes measured past times mandatory units that must live paid for skilful in addition to service." –horngren, sundem in addition to Stratton,
From the inwards a higher house definitions, it is clear that cost is the expenditures or sacrifice made for skilful or services.
Cost center
Cost oculus is a location, mortal or item of equipment for which cost may live ascertained in addition to used for the purpose of cost control. ICMA defines cost oculus every bit "a production or services. Factions, activity or item of equipment whose costs may live attributed to cost units. Influenza A virus subtype H5N1 cost oculus is the smallest organizational sub-unit for which separate cost allotment is attempted." For functional betoken of view, a cost oculus may live relatively slow to establish, because a cost oculus is whatsoever unit of measurement of the organisation to which costs tin give the sack live separately attributed. Influenza A virus subtype H5N1 cost oculus is an private activity or grouping of similar activities for which costs are accumulated. For example, production departments, a machine or grouping of machines inside a subdivision or piece of job grouping is considered every bit cost center.
Cost unit
Influenza A virus subtype H5N1 cost unit of measurement is a unit of measurement of production or unit of measurement of service to which costs are ascertained past times way of allocation, apportionment in addition to absorption. CIMS defines cost units every bit "a quantitative unit of measurement of production or service inwards relation to which cost are ascertained". It is a unit of measurement of quantity of product, service or fourth dimension or a combination of these inwards relation to which costs are expressed or ascertained. It is useful measuring of cost for comparative purposes. In preparing cost accounts, it becomes necessary to select a unit of measurement alongside which expenditures may live identified. The examples of to a greater extent than or less cost units are given below:
Industry/enterprise Cost unit
Brick works
Collieries
Textile mills
Electricity companies
Transport companies
Steel mills
Screws manufacturing
Gas
Car Per 100 bricks made.
Per ton of cost raised.
Per yard or per ib of fabric manufactured.
Pr unit of measurement of electricity generated.
Per passenger-kg., per ton-kg.
Per ton of steel made.
Per 100 screws.
Per cubic meter.
Per unit.
Costing in addition to cost accounting
Costing is 'the technique in addition to physical care for of ascertaining costs. "It provides solely the footing in addition to information for ascertainment of cost. Once the information is made available, the costing tin give the sack live carried out arithmetically, past times way from of memorandum statements or past times method of integral accounting. Cost accounting is unlike from costing inwards the feel that it is the physical care for of accounting for costs. It includes the trouble organisation human relationship ting procedures relating to recording of all income in addition to expenditures in addition to the grooming of periodical statements in addition to reports volition the object of ascertain in addition to controlling costs. It is the formal mechanism past times way of which cost of products or services are ascertained in addition to controlled.
Classification of cost
The diverse groups, into which costs are classified, are known every bit ' classes'. Costs may live classified according to unlike bases or characteristics, such as;
1. On the footing of production in addition to process
2. On the footing of chemical factor or nature
3. On the footing of function
4. On the footing of demeanour or variability
5. On the footing of controllability.
On the footing of production in addition to process
In cost accounting, a manufacturing industrial plant life has to behave diverse types of cost inwards the physical care for of production. These production costs may live sub-divided into next 2 types.
Direct expenditure
It included all those expenditures which tin give the sack live easily identified wholly alongside a unit of measurement of cost. It contains stuff expenses, labor expenses in addition to guide expenses e.g. wood, labor are the skilful examples of guide expenses for a slice of furniture manufacturer.
Indirect expenditure
Indirect expenditure are those expenditure which are incurred for the reward of publish of cost oculus in addition to are non easily identified alongside a exceptional cost oculus e.g. paints, blast etc. on furniture.
On the footing of chemical factor or nature
On the footing element, cost tin give the sack live divided into material, labor in addition to expense. They pick out been mentioned inwards details inwards the following.
Materials
Materials are needed to create or provide services. They tin give the sack live classified into guide in addition to indirect are given below:
Direct material: way the materials which from constituent of finished output in addition to tin give the sack live identified alongside the finished production easily. For example: wood, plywood, adhesive, forest polish, mails etc. inwards illustration of manufacturing cloth, cost of atomic publish 26 inwards illustration of manufacturing machinating cotton fiber yarn, cost of yarn inwards illustration of manufacturing furniture, cost of atomic publish 26 inwards illustration of manufacturing mechanism etc. the primary characteristic of guide materials inwards that instruct into into in addition to shape constituent of the finished product.
Indirect stuff cost: refers to the stuff cost, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost unit. These are the materials, which cannot live traced every bit constituent of the product, in addition to their cost is distributed amid the diverse cost oculus or cost units on to a greater extent than or less equitable basis.
Examples of indirect materials are cost in addition to fuel for generating power, cotton fiber waste, lubricating fossil oil in addition to grease used inwards maintaining the machinery, materials consumed for repair in addition to maintenance work, dusters in addition to brooms used for cleaning the manufacturing industrial plant life etc.
Labor
Lab our is needed to convert the raw materials into finished products. It is likewise needed to provide the goods inwards the manus of ultimate consumer. It tin give the sack farther live divided into 2 types every bit given below:
Direct labor: is the workforce, which is straight involved on production. It refers to lab our cost, which tin give the sack live identified alongside in addition to allocate to cost centers or cost units. It includes the remuneration paid for converting the raw stuff into finished products or for altering the construction, composition or status of the or ducts manufactured past times an undertaking. For example, payoff paid for spinning yarn inn illustration of spinning mills, payoff paid for weaving fabric inwards illustration of fabric mills, payoff paid to a bricklayer for structure of a edifice past times a edifice contractor etc.
Indirect labor cost: refers to the labor cost or wages, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost units. For example; salary paid to manufacturing industrial plant life manager, salary paid to manufacturing industrial plant life supervisor or foremen, salary paid to full general director or sales director etc.
Other expenses
The expenses which are needed inwards course of pedagogy of production in addition to distribution except stuff in addition to labor autumn into this category. They tin give the sack live divided into 2 types every bit mentioned below:
Direct expenses: these costs are likewise called chargeable ex
penses. They are the expenses other than guide stuff in addition to labor cost, in addition to tin give the sack live identified alongside in addition to allocated to cost centers or cost units. Direct expenses are those which are incurred for each unit of measurement of industry specifically in addition to identifiable alongside them. For example, royalties paid on the footing of output, hire charges of special industrial plant life or machinery, wagon in addition to freight on guide stuff purchased, import duty in addition to octopi paid on the buy of imported guide materials, amount payable to sub-contracts etc.
Indirect expense: refer to the expenses, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost units, for example; rent taxes, in addition to insurance of manufacturing industrial plant life building, manufacturing industrial plant life lighting, repairs to manufacturing industrial plant life building, depreciation to industrial plant life in addition to machinery, repairs to machinery, depreciation in addition to insurance of business office building, depreciation in addition to insurance of showroom edifice etc. are known every bit indirect expenses.
On the footing of faction
Based on the functions, the cost live classified into production cost, direction cost, selling in addition to distribution cost, in addition to enquiry in addition to evolution cost.
Production cost
It includes all guide material, guide labor, guide expenses in addition to manufacturing expenses. It refers to cost concerned alongside manufacturing activity, which starts alongside provide of stuff in addition to ends alongside primary packing of the product.
Administration cost
It is incurred for carrying the administrative constituent of the organisation i.e. cost of policy formulation in addition to its implementation to accomplish the objective of the organization. It should non live related to research, development, production, distribution or selling activities. It is likewise called business office cost.
Selling in addition to distribution cost
The selling cost refers to the cost of selling constituent i.e., the cost of activities relating to create in addition to get demand for company's products in addition to to secure orders. The distribution costs are incurred to brand goods available to the customers. These costs include the cost of maintaining in addition to creating demand of product, making the goods available inwards the manus of customer. They are likewise called full cost or cost of sales.
Research in addition to evolution costs
The enquiry cost is the cost of searching for novel products, novel manufacturing process, improvement of existing products, processes or equipment in addition to the evolution cost is the cost of putting enquiry termination on commercial basis.
On the footing of demeanour or variability
On the footing of the behaviors inwards relation to changes inwards the book of activity, cost may live classified as, fixed cost, diverse costs in addition to semi-variable cost.
Fixed cost
The costs, whose full amount remains constant, upwards to a sure enough capacity is called fixed cost. The score of production changes, but full amount of fixed cost remains constant. Fixed cost is likewise called capacity cost, periodic cost, standing cost in addition to burden cost. If the score of production increase in addition to so per unit of measurement cost decreases in addition to vice-versa, but full amount of fixed cost rest constant. These costs rest fixed inwards full but their per unit of measurement cost changes alongside changes inwards output or sales. The per unit of measurement fixed cost increase alongside decrease inwards output in addition to vice versa.Rent, depreasciation in addition to salary of permanent staff are the examples of fixed cost.
Feature of fixed cost
i. The amount of fixed cost is never zero, fifty-fifty idea the production is zero.
ii. The amount of fixed cost is constant upwards to a sure enough range.
iii. Per unit of measurement fixed cost charges inwards reverse direction of production activity.
iv. Fixed cost are either capacity costs or periodic in addition to past times the lower score responsibility.
v. Generally, fixed costs are unavoidable in addition to uncontrollable costs.
Variable cost
The costs that modify proportionately alongside the modify inwards output are known every bit variable costs. An increase inwards the book way a proportionate increase inwards the full variable costs in addition to decrease inwards book volition atomic number 82 to a proportionate turn down inwards the full variable costs. There is a linear human relationship betwixt book in addition to variable costs. The variable cost per unit of measurement is ever constant.
When production is zero, the full amount of variable cost is likewise zero. Variable cost is likewise called margin cost, guide cost, bag costs etc. guide stuff cost; guide labor cost in addition to guide expenses are the illustration of variable costs.
Feature of variable cost
i. Per unit of measurement variable cost remains constant.
ii. When the production is zero, in addition to so the full amount of variable cost is likewise zero, but per unit of measurement variable cost volition never live zero.
iii. Total amount of variable cost changes according to changes inwards score of production.
iv. Variable cost is a controllable cost.
Semi-variable cost
The costs which are neither perfectly variable nor absolutely fixed inwards relation to changes inwards book are called semi-variable costs. Neither full amount nor per unit of measurement cost of semi-variable cost remains constant. If the levels of production increase than full amount of semi-variable cost likewise increase in addition to per unit of measurement cost decreases but non proportionately. These costs pick out the characteristics of both fixed in addition to variable costs. Electricity charges, telephone charges, H2O provide accuse re the illustration of semi-variable costs. They are likewise called mixed costs, combined costs or semi-fixed costs.
Features of semi-variable cost
i. Neither full amount nor per unit of measurement cost remains constant.
ii. Semi-variable cost tin give the sack never live zero.
iii. When the score of production increase in addition to so full amount of semi-variable cost likewise increase but per unit of measurement semi-variable cost decreased in addition to vice-versa.
On the footing of controllability
An effective cost command requires cognition of cost controllability. Controllable may live defined inwards terms of accuse or alternatives of costs.
Controllable cost
The cost dependent champaign to command or substantial influence of a exceptional director or private is called controllable cost. The cost than tin give the sack live changed or alternated past times the activity of a specific director is treated every bit controllable costs.
Uncontrollable cost
Cost that is non dependent champaign to influence past times the activity of create out is called uncontrollable costs. These costs rest unchanged.
Cost accounting involves collecting, classifying, recording in addition to appropriate allotment of expenditures for determining the cost of products or services. Costs pick out unlike features or characteristics. For proper command in addition to managerial decisions, direction is to live provided wit
Concept or pregnant of cost
The term "cost" has a diversity of interpretations inwards mutual use. In ordinary language, it may hateful price. The oxford lexicon defines "cost" every bit the toll paid for something. But inwards cost accounting. It is considered unlike from price.
In cost accounting, cost is the amount of resources given upwards inwards exchanges for to a greater extent than or less goods or services. The resources given upwards are to a greater extent than often than non inwards terms of coin of if non inwards term of money; they are ever expressed inwards monetary units. It consists of all the expenses incurred inwards producing a commodity or exciting a contract. If signified or monetary outlay to secure to a greater extent than or less benefit.
The term 'cost' itself has no important meaning, therefore, it is ever used alongside an describing word or phrase that conveys the pregnant intended, such every bit prime, direct, indirect, fixed, variable, controllable, opportunity, marginal, replacement in addition to the like. Such description implies a sure enough characteristic, which is of import inwards computing in addition to analyzing the cost.
"Cost may live defined every bit the sacrifice or giving upwards resources for a exceptional purpose. Cost is ofttimes measured past times mandatory units that must live paid for skilful in addition to service." –horngren, sundem in addition to Stratton,
From the inwards a higher house definitions, it is clear that cost is the expenditures or sacrifice made for skilful or services.
Cost center
Cost oculus is a location, mortal or item of equipment for which cost may live ascertained in addition to used for the purpose of cost control. ICMA defines cost oculus every bit "a production or services. Factions, activity or item of equipment whose costs may live attributed to cost units. Influenza A virus subtype H5N1 cost oculus is the smallest organizational sub-unit for which separate cost allotment is attempted." For functional betoken of view, a cost oculus may live relatively slow to establish, because a cost oculus is whatsoever unit of measurement of the organisation to which costs tin give the sack live separately attributed. Influenza A virus subtype H5N1 cost oculus is an private activity or grouping of similar activities for which costs are accumulated. For example, production departments, a machine or grouping of machines inside a subdivision or piece of job grouping is considered every bit cost center.
Cost unit
Influenza A virus subtype H5N1 cost unit of measurement is a unit of measurement of production or unit of measurement of service to which costs are ascertained past times way of allocation, apportionment in addition to absorption. CIMS defines cost units every bit "a quantitative unit of measurement of production or service inwards relation to which cost are ascertained". It is a unit of measurement of quantity of product, service or fourth dimension or a combination of these inwards relation to which costs are expressed or ascertained. It is useful measuring of cost for comparative purposes. In preparing cost accounts, it becomes necessary to select a unit of measurement alongside which expenditures may live identified. The examples of to a greater extent than or less cost units are given below:
Industry/enterprise Cost unit
Brick works
Collieries
Textile mills
Electricity companies
Transport companies
Steel mills
Screws manufacturing
Gas
Car Per 100 bricks made.
Per ton of cost raised.
Per yard or per ib of fabric manufactured.
Pr unit of measurement of electricity generated.
Per passenger-kg., per ton-kg.
Per ton of steel made.
Per 100 screws.
Per cubic meter.
Per unit.
Costing in addition to cost accounting
Costing is 'the technique in addition to physical care for of ascertaining costs. "It provides solely the footing in addition to information for ascertainment of cost. Once the information is made available, the costing tin give the sack live carried out arithmetically, past times way from of memorandum statements or past times method of integral accounting. Cost accounting is unlike from costing inwards the feel that it is the physical care for of accounting for costs. It includes the trouble organisation human relationship ting procedures relating to recording of all income in addition to expenditures in addition to the grooming of periodical statements in addition to reports volition the object of ascertain in addition to controlling costs. It is the formal mechanism past times way of which cost of products or services are ascertained in addition to controlled.
Classification of cost
The diverse groups, into which costs are classified, are known every bit ' classes'. Costs may live classified according to unlike bases or characteristics, such as;
1. On the footing of production in addition to process
2. On the footing of chemical factor or nature
3. On the footing of function
4. On the footing of demeanour or variability
5. On the footing of controllability.
On the footing of production in addition to process
In cost accounting, a manufacturing industrial plant life has to behave diverse types of cost inwards the physical care for of production. These production costs may live sub-divided into next 2 types.
Direct expenditure
It included all those expenditures which tin give the sack live easily identified wholly alongside a unit of measurement of cost. It contains stuff expenses, labor expenses in addition to guide expenses e.g. wood, labor are the skilful examples of guide expenses for a slice of furniture manufacturer.
Indirect expenditure
Indirect expenditure are those expenditure which are incurred for the reward of publish of cost oculus in addition to are non easily identified alongside a exceptional cost oculus e.g. paints, blast etc. on furniture.
On the footing of chemical factor or nature
On the footing element, cost tin give the sack live divided into material, labor in addition to expense. They pick out been mentioned inwards details inwards the following.
Materials
Materials are needed to create or provide services. They tin give the sack live classified into guide in addition to indirect are given below:
Direct material: way the materials which from constituent of finished output in addition to tin give the sack live identified alongside the finished production easily. For example: wood, plywood, adhesive, forest polish, mails etc. inwards illustration of manufacturing cloth, cost of atomic publish 26 inwards illustration of manufacturing machinating cotton fiber yarn, cost of yarn inwards illustration of manufacturing furniture, cost of atomic publish 26 inwards illustration of manufacturing mechanism etc. the primary characteristic of guide materials inwards that instruct into into in addition to shape constituent of the finished product.
Indirect stuff cost: refers to the stuff cost, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost unit. These are the materials, which cannot live traced every bit constituent of the product, in addition to their cost is distributed amid the diverse cost oculus or cost units on to a greater extent than or less equitable basis.
Examples of indirect materials are cost in addition to fuel for generating power, cotton fiber waste, lubricating fossil oil in addition to grease used inwards maintaining the machinery, materials consumed for repair in addition to maintenance work, dusters in addition to brooms used for cleaning the manufacturing industrial plant life etc.
Labor
Lab our is needed to convert the raw materials into finished products. It is likewise needed to provide the goods inwards the manus of ultimate consumer. It tin give the sack farther live divided into 2 types every bit given below:
Direct labor: is the workforce, which is straight involved on production. It refers to lab our cost, which tin give the sack live identified alongside in addition to allocate to cost centers or cost units. It includes the remuneration paid for converting the raw stuff into finished products or for altering the construction, composition or status of the or ducts manufactured past times an undertaking. For example, payoff paid for spinning yarn inn illustration of spinning mills, payoff paid for weaving fabric inwards illustration of fabric mills, payoff paid to a bricklayer for structure of a edifice past times a edifice contractor etc.
Indirect labor cost: refers to the labor cost or wages, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost units. For example; salary paid to manufacturing industrial plant life manager, salary paid to manufacturing industrial plant life supervisor or foremen, salary paid to full general director or sales director etc.
Other expenses
The expenses which are needed inwards course of pedagogy of production in addition to distribution except stuff in addition to labor autumn into this category. They tin give the sack live divided into 2 types every bit mentioned below:
Direct expenses: these costs are likewise called chargeable ex
Indirect expense: refer to the expenses, which cannot live allocated but tin give the sack live apportioned to or absorbed past times cost centers or cost units, for example; rent taxes, in addition to insurance of manufacturing industrial plant life building, manufacturing industrial plant life lighting, repairs to manufacturing industrial plant life building, depreciation to industrial plant life in addition to machinery, repairs to machinery, depreciation in addition to insurance of business office building, depreciation in addition to insurance of showroom edifice etc. are known every bit indirect expenses.
On the footing of faction
Based on the functions, the cost live classified into production cost, direction cost, selling in addition to distribution cost, in addition to enquiry in addition to evolution cost.
Production cost
It includes all guide material, guide labor, guide expenses in addition to manufacturing expenses. It refers to cost concerned alongside manufacturing activity, which starts alongside provide of stuff in addition to ends alongside primary packing of the product.
Administration cost
It is incurred for carrying the administrative constituent of the organisation i.e. cost of policy formulation in addition to its implementation to accomplish the objective of the organization. It should non live related to research, development, production, distribution or selling activities. It is likewise called business office cost.
Selling in addition to distribution cost
The selling cost refers to the cost of selling constituent i.e., the cost of activities relating to create in addition to get demand for company's products in addition to to secure orders. The distribution costs are incurred to brand goods available to the customers. These costs include the cost of maintaining in addition to creating demand of product, making the goods available inwards the manus of customer. They are likewise called full cost or cost of sales.
Research in addition to evolution costs
The enquiry cost is the cost of searching for novel products, novel manufacturing process, improvement of existing products, processes or equipment in addition to the evolution cost is the cost of putting enquiry termination on commercial basis.
On the footing of demeanour or variability
On the footing of the behaviors inwards relation to changes inwards the book of activity, cost may live classified as, fixed cost, diverse costs in addition to semi-variable cost.
Fixed cost
The costs, whose full amount remains constant, upwards to a sure enough capacity is called fixed cost. The score of production changes, but full amount of fixed cost remains constant. Fixed cost is likewise called capacity cost, periodic cost, standing cost in addition to burden cost. If the score of production increase in addition to so per unit of measurement cost decreases in addition to vice-versa, but full amount of fixed cost rest constant. These costs rest fixed inwards full but their per unit of measurement cost changes alongside changes inwards output or sales. The per unit of measurement fixed cost increase alongside decrease inwards output in addition to vice versa.Rent, depreasciation in addition to salary of permanent staff are the examples of fixed cost.
Feature of fixed cost
i. The amount of fixed cost is never zero, fifty-fifty idea the production is zero.
ii. The amount of fixed cost is constant upwards to a sure enough range.
iii. Per unit of measurement fixed cost charges inwards reverse direction of production activity.
iv. Fixed cost are either capacity costs or periodic in addition to past times the lower score responsibility.
v. Generally, fixed costs are unavoidable in addition to uncontrollable costs.
Variable cost
The costs that modify proportionately alongside the modify inwards output are known every bit variable costs. An increase inwards the book way a proportionate increase inwards the full variable costs in addition to decrease inwards book volition atomic number 82 to a proportionate turn down inwards the full variable costs. There is a linear human relationship betwixt book in addition to variable costs. The variable cost per unit of measurement is ever constant.
When production is zero, the full amount of variable cost is likewise zero. Variable cost is likewise called margin cost, guide cost, bag costs etc. guide stuff cost; guide labor cost in addition to guide expenses are the illustration of variable costs.
Feature of variable cost
i. Per unit of measurement variable cost remains constant.
ii. When the production is zero, in addition to so the full amount of variable cost is likewise zero, but per unit of measurement variable cost volition never live zero.
iii. Total amount of variable cost changes according to changes inwards score of production.
iv. Variable cost is a controllable cost.
Semi-variable cost
The costs which are neither perfectly variable nor absolutely fixed inwards relation to changes inwards book are called semi-variable costs. Neither full amount nor per unit of measurement cost of semi-variable cost remains constant. If the levels of production increase than full amount of semi-variable cost likewise increase in addition to per unit of measurement cost decreases but non proportionately. These costs pick out the characteristics of both fixed in addition to variable costs. Electricity charges, telephone charges, H2O provide accuse re the illustration of semi-variable costs. They are likewise called mixed costs, combined costs or semi-fixed costs.
Features of semi-variable cost
i. Neither full amount nor per unit of measurement cost remains constant.
ii. Semi-variable cost tin give the sack never live zero.
iii. When the score of production increase in addition to so full amount of semi-variable cost likewise increase but per unit of measurement semi-variable cost decreased in addition to vice-versa.
On the footing of controllability
An effective cost command requires cognition of cost controllability. Controllable may live defined inwards terms of accuse or alternatives of costs.
Controllable cost
The cost dependent champaign to command or substantial influence of a exceptional director or private is called controllable cost. The cost than tin give the sack live changed or alternated past times the activity of a specific director is treated every bit controllable costs.
Uncontrollable cost
Cost that is non dependent champaign to influence past times the activity of create out is called uncontrollable costs. These costs rest unchanged.
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