What Are Components Of Cost?

What are 3 key factors in controlling overall construction cost?

There are many factors which affect the construction cost estimate and have significant impact on project cost and they are as following:Similar Construction Projects.

Construction Material Costs.

Labor Wage Rates.

Construction Site Conditions.

Inflation Factor.

Project Schedule.

Quality of Plans & Specifications.More items…•.

What are the types of cost control?

Cost Control Techniques1 – Planning the Project Budget. You would need to ideally make a budget at the beginning of the planning session with regard to the project at hand. … 2 – Keeping a Track of Costs. … 3 – Effective Time Management. … 4 – Project Change Control. … 5 – Use of Earned Value.

Which cost is known as work cost?

This preview shows page 5 – 7 out of 15 pages. Also known as works cost, production or manufacturing cost, Factory costincludesprime cost along with works or factory overheads. Factory overheads include cost ofindirect material, indirect wages, and other indirect expenses incurred in the factory.

What are the major types of costs?

Direct, indirect, fixed, and variable are the 4 main kinds of cost. In addition to this, you might also want to look into operating costs, opportunity costs, sunk costs, and controllable costs.

What are cost concepts?

Cost analysis is all about the study of the behavior of cost with respect to various production criteria like the scale of operations, prices of the factors of production, size of output, etc. It is all about the financial aspects of production.

What is the difference between TC and TFC called?

The total cost varies directly with output because a significant part of it increases as output is measured in OY-axis. The TFC curve runs parallel to OX-axis a fixed costs remain constant whatever the level of output. … Total cost (TC) is obtained by adding up vertically total fixed cost and total variable cost curve.

What are the five cost concepts?

added to a product at each stage of the production process. L.O. 5 Define basic cost behaviors, including fixed, variable, semivariable, and step costs.

What are the 4 types of production?

Four types of production Unit or Job type of production. Batch type of Production. Mass Production or Flow production. Continuous production or Process production.

What are the components of product cost?

The costs involved in creating a product are called Product Costs. These costs include materials, labor, production supplies and factory overhead. The cost of the labor required to deliver a service to a customer is also considered a product cost.

What are the components of cost control?

Key components of a cost management planCost variance plan.Cost management approach.Cost estimation.Cost baseline.Cost control and reporting process.Change-control process.Project budget.

What are the 3 types of cost?

The types are: 1. Fixed Costs 2. Variable Costs 3. Semi-Variable Costs.

What are the 3 types of product costs?

The three basic categories of product costs are detailed below:Direct material. Direct material costs are the costs of raw materials or parts that go directly into producing products. … Direct labor. Direct labor costs are the wages. … Manufacturing overhead.

What are the two basic components of total cost?

Components of total cost are constituted mainly of prime cost, factory cost, office cost and cost of sales.

What are the 4 types of cost?

Following this summary of the different types of costs are some examples of how costs are used in different business applications.Fixed and Variable Costs.Direct and Indirect Costs. … Product and Period Costs. … Other Types of Costs. … Controllable and Uncontrollable Costs— … Out-of-pocket and Sunk Costs—More items…•

What are the four basic components of production?

Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. The first factor of production is land, but this includes any natural resource used to produce goods and services.

What are the 3 major components of costs?

The three general categories of costs included in manufacturing processes are direct materials, direct labor, and overhead.

What are the three major components of the production process?

Production system consists of three main components viz., Inputs, Conversion Process and Output.Inputs include raw-materials, machines, man-hours, components or parts, drawing, instructions and other paper works.Conversion process includes operations (actual production process).More items…•

What are the major techniques of cost control?

The major techniques which used in cost control are standard costing and budgetary control. It is a continuous process which helps in analyzing the causes for variances. For example- control wastage of material, any embezzlement and so on.

How will you classify cost?

Cost classification involves the separation of a group of expenses into different categories. … Fixed and variable costs. Expenses are separated into variable and fixed cost classifications, and then variable costs are subtracted from revenues to arrive at a company’s contribution margin.

What are the major components of cost of production?

The key elements included in the production costs are as follows:Purchase of raw machinery.Installation of plant and machinery.Wages of labor.Building rent.Interest on capital.Wear and tear of building and machinery.Advertisement expenses.Payment of taxes.More items…