Rakesh Sahu
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CA Sandeep Bohra
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Costs can be classified in various different ways depending on its nature and a specific purpose. There are various types of costs classified into logical groupings. These groups are such that each and every item of cost can be classified. These classifications of costs make the cost information meaningful. It is of utmost importance to the management of a manufacturing concern. It is a first step towards their decision making process relating to costs and costing.
**Classification of Costs**
**On the basis of Time period:**
-- Historical Costs
-- Current Costs
-- Pre-determined Costs
**On the basis of Behaviour / Nature / Variability**
-- Variable Costs
-- Fixed Costs
-- Semi-variable Costs
**On the basis of Elements**
-- Materials
-- Labour
-- Expenses
**On the basis of Relationship**
-- Direct Costs
-- Indirect Costs
**On the basis of Controllability**
-- Controllable Costs
-- Uncontrollable Costs
**On the basis of Functions or operations**
-- Production Cost
-- Administration Cost
-- Selling Cost
-- Distribution Cost
-- Research Cost
-- Development Cost
-- Pre-production Cost
-- Conversion Cost
**On the basis of Normality**
-- Normal Cost
-- Abnormal Cost
**On the basis of Attributability to the product**
-- Period Cost
-- Product Cost
**On the basis of Decision Making**
-- Relevant Costs
-- Irrelevant Costs
rohit awasthi
answered
Dear Friend
> Classification of Costs
1. On the basis of Time period:
-- Historical Costs
-- Current Costs
-- Pre-determined Costs
2. On the basis of Behaviour / Nature / Variability
-- Variable Costs
-- Fixed Costs
-- Semi-variable Costs
3. On the basis of Elements
-- Materials
-- Labour
-- Expenses
4. On the basis of Relationship
-- Direct Costs
-- Indirect Costs
5. On the basis of Controllability
-- Controllable Costs
-- Uncontrollable Costs
6. On the basis of Functions or operations
-- Production Cost
-- Administration Cost
-- Selling Cost
-- Distribution Cost
-- Research Cost
-- Development Cost
-- Pre-production Cost
-- Conversion Cost
7. On the basis of Normality
-- Normal Cost
-- Abnormal Cost
8. On the basis of Attributability to the product
-- Period Cost
-- Product Cost
9. On the basis of Decision Making
-- Relevant Costs
-- Irrelevant Costs
Thanks
