What are the elements of cost?

direct materials ,direct labors , manufacturing over head 

Core/Direct Elements (Example SmartPhone)1.Direct Materials (Lcd, panel, touch...)2.Direct Labour (Operational staff involved during production)3.Direct Overhead (Rent of factory,machine electricity of production unit)

Other Elements = Indirect Material/Labour/Overheads Otherdepartments incur indirect cost normally.

If you are talking about product cost, this veries industry to industry and company to company, on a broader prospective whatever incurred for producing the product and bringing it to warehouse, you need to also add any costs related to people sitting in head office but mainly support production, in the last but not least is the supply chain cost that needs to be allocated to production, Sales and Admin based on certain agreed allocation keys

The person asked this question is from cement industry, hence process costing mechanism will be used here

If you are talking about Opex or Capex cost, then it a altogather different than above, all operation expenditures including a certain portion of supply chain allocation will be taken here, later divide it into Admin and Selling cost

If you are talking about Capex, than all coss incurred on project in the nature of fixed assets will be taken later on after completion of certain % of completion it will be capitalised upon agreed plan over project completion

 

 

Fixed cost + variable cost + profit 

Material, Labor (Direct or Indirect) and Expenses

Element of Cost...

Elements of Cost can be Direct or Indirect

Direct Cost Usually Consist of Materials and Mark-up

In Direct Cost Consist of Both plus the Manpower.

In Costing the important elements is the Updated Material Cost in this you can adjust the other elements depends on your Manpower Cost and Margin.

Materials, labor and overheads are the element of cost, all direct and indirect cost of said element s are considered for cost accounting...

Elements of cost as:-

• Direct Material,Direct Labour,Direct Expenses (Prime Cost)
• Indirect Material,Indirect Labour,Indirect Expenses(Overhead)-This consist Factory OH,Office,Admin & General OH and Selling & Distibution OH.

Direct Material, wages, OH This is prime cost elements

Cost can divide in to Production Cost , Fixed cost, variable Cost, Main cost other than production.

Cost Management 1. Develop a cost plan 2. Cost estimate 3 - Determine the budget 3. Cost control