Saturday, 17 February 2018

Types of Costs in Accounting & Economics

Types of Costs

The costs involved in producing goods or services | Meaning, pronunciation, translations and examples.
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost.
- According to Wikipedia

The proposed or estimated cost of producing or undertaking something.
- According to Google Search

To produce something whether it is goods or services then needs a calculated and known the magnitude of the cost or the need and the possibility of obtaining revenue which may be accepted. Every sacrifice costs always expected would bring bigger results than had been sacrificed in the foreseeable future.

Thus, an entrepreneur should be aware of how the magnitude of the sacrifice in the process of production of basically every cost component for company. In this case, total costs can always be calculated and can be compared with the total enrollment may be obtained with the possible profits to be gained.

Types of Costs in Accounting & Economics

Talk about the issue of cost is an issue that is quite extensive, therefore in them look two interconnected parties. When we pay attention to the costs that must be incurred for a production process, then it can be split into two properties, that is, which is the cost for producers on behalf of which it gets is give the best production factors on the company in question.

The case for the consumer, the cost to acquire the tools of satisfied his needs or income for those who provide the tools satisfied those needs. The cost (cost) is the amount that is measured in units of money, i.e. the expenditure-expenditure in constant form or in the form of wealth transfer expenditure share capital, services included or obligations incurred, in relation to the goods or services obtained or to be obtained at the time of coming, because issuing costs means expect more returns. 

From the definition and understanding of the costs above, it can be said that the cost of understanding expressed above is a thing that is still a widespread sense since all that pertained in spending significantly in its entirety including the the cost.

A provide a supervisor about the cost (cost) and cost (expense), in the following cost is costs are considered will provide benefits or service potential in time will come and therefore constitutes the assets included in the balance sheet. Rather expense  cost is a cost that has been used to make accomplishment. Types of costs it can no longer provide benefits on upcoming, then her place is on estimates of income.

The classifies costs according to the purpose of planning and supervision, as follows: 

  1. Variable costs and fixed costs
  2. Costs that can be controlled 

Charge is an amount of expenditure which could not be avoided linking the behavior of costs with the changes in the volume of activities the following is a number of variable costs costs that in total fluctuate in direct proportion to the volume of sales or production, or the size of the other activities.

While the fixed fee or cost capacity cost is to maintain the ability to operate the company on a certain capacity levels especially in the capacity costs in the production process of the company.
From the above outline, then known as follows:

  1. Variable costs are the costs which change to keep up with the volume of production or sales. For example the only direct materials or participate in the process of products, raw material directly used in the production process of direct labor cost.
  2. Fixed costs are costs that do not change although there are changes in the volume of production or sales. For example, monthly salary, insurance, depreciation, cost of the public and others. The nature of these costs is essential for known a Manager in planning development efforts because it will thus obtained a good fee for classification purposes and planning and supervision.

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