S.K.SONI*COSTCOST: It may be defined as the monetary value of all sacrifices made to achieve an objective (i.e. to produce goods and services)

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S.K.SONI*Product CostsThe cost assigned to goods that were either purchased or manufactured for resale.Period CostsCosts that are identified with the period in which they are incurred.The Meaning of Cost?The sacrifice made, usually measured by the resources given up, to achieve a particular purpose.

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S.K.SONI*COSTING Costing is simply cost finding.It may be defined as the technique and processes of ascertaining costs. Costing is classifying, recording and appropriate allocation of expenditure for the cost determination of the product or services

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S.K.SONI*ELEMENTS OF COSTThere are 3 major elements of costs: Materials

commodities supplied to undertaking.Labour

The cost of paying employees includes salaries, bonus, etc.Expenses

Cost other than material & labour

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S.K.SONI*ELEMENTS OF COST

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S.K.SONI*DIRECT MATERIAL: Generally becomes a part of finished product. e.g. fibre, for spinning Mill, sugarcane for sugar factory. INDIRECT MATERIAL: Necessary in production process but not become integral part of product. e.g. Oil, Grease, sand paper,MATERIALCost of commodities supplied to an undertaking.

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S.K.SONI*LABOURCost of remuneration (expenses on wages) includes salaries, bonuses DIRECT LABOUR Wages paid to employees engage in converting raw material into finished product. e.g. sider, INDIRECT LABOUR Wages paid to employees those who are not engage in production process. e.g. Security Guards.

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S.K.SONI* EXPENSESAll the cost other than material and labour are termed as expenses.DIRECT EXPENSES Expenses which are specifically incurred on particular job/product. e.g. Power, design cost, etc.

INDIRECT EXPENSES All the indirect cost other than indirect material and indirect labour are termed as indirect expenses. e.g. Telephone bill, Rent, Insurance, etc.

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S.K.SONI*PRIME COST

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S.K.SONI*OVERHEADS

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S.K.SONI*OVERHEADS

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S.K.SONI*TOTAL COST

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S.K.SONI*Manufacturing CompaniesPrime Costs include:

Direct Materials

Direct Labor

Direct Expenses

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S.K.SONI*Manufacturing CompaniesFactory Costs include:

Direct Materials

Direct Labor

Direct ExpensesProduction Overhead+

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S.K.SONI*Manufacturing CompaniesCost of Production include:

Direct Materials

Direct Labor

Direct ExpensesProduction Overhead+Office & Admn. Overheads+

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S.K.SONI*Manufacturing CompaniesCost of sales include:

COST OF PROD

SELLING & DIST. OVERHEADS+

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S.K.SONI* Materials

Labour

Expenses

Indirect labordirect labordirect materialIndirect materialIndirect expdirect exp

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