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Costs are generally Classified as Fixed Costs and Variable costs depends upon their nature to constitute the total cost.
Fixed Costs:
A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.
Variable costs
are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases. Variable costs differ from fixed costs such as rent, advertising, insurance and office supplies, which tend to remain the same regardless of production output.
Total cost calculation is based on Fixed Costs + Variable costs.
or
Prime Cost+Factory Overheads=Factory cost + Selling and Distribution Overheads=Cost of Sales+profit = Sales Revenue.
Operational Expenses
Non Operational Expenses
Capital Expenditures
Controllable expenses
Non Controllable Expenses
Fixed Expenses
Variable Expenses
