Costs means the financial value of all consumed inputs into production of something. It could be production of Products or services or perfoming any other supporting activities or processes in the company. Costs is the sum of financial value that an organization has effectively spent on making revenue, regardless of whether they were actually paid in the period. Costs can also be expressed as consumption resources (material, work effort, utilities, services or risks incurred)
All expenses are costs, but not all costs are expenses.
What are the basic types of costs?
| ** Cost Calculation Breakdown ** - Breakdown Used in Management Accounting | management accounting}, controlling: |
- Direct Costs
-
{Indirect Costs Indirect Costs
Breakdown of costs according to the volume of performance:
They are also often divided according to whether they value property to:
- Operating costs (Operational expenditure)
- Investment Costs (Investment Expenses)
Other cost types are:
- Marginal Costs
- Opportunity Costs
- Unit Costs
- Transaction Costs
- Sunk Costs
- Relevant costs
- Irrelevant Costs
- Differential Cost
- Production costs
- Sales Costs
- Marketing costs
- Financing cost
Why do we need to know costs?
| Cost tracking is one of the basic necessities of any organization. It is up to her to consider in what detail the costs will be tracked for her own purposes (Management Accounting | Managerial Accounting). In most countries, the basic cost tracking structure is Legislation legislation for the purpose of bookkeeping. Costs along with Revenue Revenue} profit. |
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