Element of Cost

There are many element of cost.These elements are as below..

1.Material

It is the first element of cost .The amount that expands to purchase ,store of raw materials this amount is called Material cost

2..Labour cost.

It is the second element of cost.The amount that is expanded to pay labour to get their knowledge ,talent,skill,wisdom this amount is called labour cost

3.Expenses

It is also an important element of cost .The amount that is expanded besides material and labour this amount is called expenses

All these expenditure may be classified  into two parts.One is direct and second is indirect


1.Direct material cost

It is the  first part of material cost..The material that is used in production process and the amount we expand on it called direct material cost. In other words we can say that the amount that be expand to purchase and use material this is called direct material cost

2.indirect material cost

The amount that be expand to store ,transport material into godan to plant this is called indirect material cost

1.Direct labour cost

The labour that works in plant or production process this is called direct labour.

The amount that be expanded to such type of labour these amount is called direct labour cost.

2.Indirect labour cost

The labour who works in concern activity of production this type of labour is called indirect labour. 

The amount that we expended to such type of labour these type of labour is called indirect labour cost

1.Direct expenses

the amount that is expanded in concern activity of production .this type of expenses is callled direct expenses. 

2.Indirect expenses

The amount that is expanded besides indirect material and indirect labour all these amount is known as indirect expenses. 

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