Cost classification

By nature
By traceability
Production and non production cost
By behavior
Cost by nature
Material
( tangible and physically touch) Labour( salary and wages paid)
other expense
Sugar d

production line workers

Water d

Factory supervisor I

Aluminum d

sales manager

Factory building

Electricity I
Insurance I

Finance director I

Utility I
Royalty d

Delivery vehicle I
By traceability
Direct cost
Can easily link to the cost to the one unit of the product
easily traced back to the one unit
Sum of direct cost = prime cost

indirect cost
cant
of the product
sum

of indirect cost = overhead costs

Production cost
cost

Non production

That must be incurred in order

not necessary for the

Cost which are

to produce unit or provide services

product.

production of a

Administrative cost
selling cost