After reading this article you will learn about:- 1. Elements of Cost 2. Nature of Cost 3. Types. Elements of Cost: The costs of an industrial enterprise may be divided into three principle elements, namely: 1. Material. 2. Labour. 3. Expense. 1. Material Cost: It is the cost of commodities supplied to an undertaking. It is of two types: (a) [...]
Among the many methods that have been adopted to apply overhead to production, the most common ones have been dealt below:- 1. Percentage of Direct Labour Cost. 2. Percentage of Direct Material Cost. 3. Prime Cost Percentage Rate. 4. Labour Hour Rate. 5. Machine Hour Rate. 6. Production Unit Method. Method # 1. Percentage of Direct Labour Cost: This method [...]
After reading this article you will learn about:- 1. Meaning of Standard Cost 2. Determination of Standard Costs 3. Advantages. Meaning of Standard Cost: It is the pre-determined cost of a product. After compiling different expenses, an estimated cost of product is forecasted, which is known as “Standard cost”. It is used as a device to check and lower overhead [...]