![]() ![]() The profit portion is generally added to the extent a company sees its product that would create value for the consumers. read more or the total cost incurred to make the product available to sell, a profit portion is also added to arrive at the product’s final price or service. These are directly related to the products manufactured.Īpart from including the cost of sales Cost Of Sales The costs directly attributable to the production of the goods that are sold in the firm or organization are referred to as the cost of sales. Examples include rent payable, utilities payable, insurance payable, salaries payable to office staff, office supplies, etc. We divide the variable cost mainly into raw material, labor, and overhead costs Overhead Costs Overhead cost are those cost that is not related directly on the production activity and are therefore considered as indirect costs that have to be paid even if there is no production. These are fixed for the product and increase or decrease in line with the production of a unit. Variable Costs: Variable costs tend to vary with the production level and the number of units produced.A few examples of the fixed costs could be Rent, Depreciation, fixed advertisement programs, etc. Fixed costs could be from various departments such as Production, distribution, Selling, advertisement, etc. If the level of production until the fixed cost is static, it tends to increase. read more are the costs that remain static over the period until a range or level. It is the type of cost which is not dependent on the business activity. Fixed Costs: Fixed costs Fixed Costs Fixed Cost refers to the cost or expense that is not affected by any decrease or increase in the number of units produced or sold over a short-term horizon.The cost of the product mainly consists of the following heads: read more indicates the cost of producing the final products when it is readily available to be sold or transferred. ![]() It is calculated by adding fixed and variable expense and dividing it by the total number of units produced. The unit cost The Unit Cost Unit cost is the total cost (fixed and variable) incurred to produce, store and sell one unit of a product or service. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |