elements of cost

Q:- What are main elements of cost ?
Ans.
1. Direct materials
Material which are present in the finished product or can be identified in the product are called direct materials. For example , cloth in dress making , materials purchased for a specific job etc.
2. Direct labour

Labour which can be identified or attributed wholly to a particular job , product or process or expended in converting raw materials into finished products is called direct labour . For example , labour engaged on the actual production of the product or in carrying out the necessary operation for converting the raw materials into finished product .
3. Direct expenses
It includes all expenses other than direct material or direct labour which are specially incurred for a particular product or process .

4. Indirect material

Material which do not normally form part of the finished product are known as indirect materials .
5. Indirect labour
Labour cost which can not be allocated but can be apportioned to or absorbed by cost units or cost centres is known as indirect labour .
6. Indirect Expenses

Expenses other than direct expenses are known as indirect expenses . Factory rent and rates , insurance of plant and machinery , power , light , heating , repairing , telephone etc.