Sunday 27 January 2019

What is cost - Types of Costs

What is cost? – basics of costs

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 accept. Every sacrifice costs always expect would bring bigger results than had been scarify 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 perusal. In this case, total costs can always be calculate and can be compare with the total enrollment may be obtain with the possible profits to be gain.

Overview of costs in organization

Talk about the issue of cost is an issue that is quite extensive, therefore in them look two interconnect parties. Stating that that when we pay attention to the costs that must be incur for a production process, then it can be split into two properties, that is, which is the cost for producers is got to the party that delivers the best production factors on the company in question.

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

More about costs

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

In line with the definition and understanding of the above, then d. Hartanto, in his book accounting for Entrepreneurs, (2002:89), provide a supervisor about the cost (cost). In the following cost is costs are consider will provide benefits or potential service in the future and therefore constitutes the assets include in the balance sheet. Rather expense or expire cost is a cost that has been use to make accomplishment. Types of costs it can no longer provide benefits on upcoming, then her place is on estimates of income.

The types of Costs

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

  1. Variable costs and fixed costs

  2. Costs that can be control.

Change is an amount of expenditure which could not be avoid linking the behavior of costs with the changes in the volume of activity. The following variable costs is an amount of the total costs fluctuate directly proportional. To the volume of sales or production, or the size of the other activities. The fix fee or cost capacity cost is to maintain. The ability to operate the company on a certain capacity levels.

A general overview about the sense of the above costs, then known as follows:

  • 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. The process of products, raw material directly use in the production process of direct labor costs that follow the developments.

  • 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 have obtain a good fee for classification purposes and planning and supervision.

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