Type of costs

Type of costs

1. Types

   • Fixed
     • Time related
   • Variable
     • Quantity related
   • Semi-variable

2. Production

   • Direct
   • Indirect
     • Not specifically assigned

3. Taxes

   • Non-deductible
   • Deductible

4. Management

   • Production
     • Raw materials, labor, indirect manufacturing
   • Sales & distribution
   • Administration
     • Corporate headquarters, back office staff
   • Financial

5. Quality

   • Prevention
     • Planned to minimize defects
   • Evaluation
     • To measure, assess & audit
   • Internal failure
     • Correct before client receives
   • External failure
     • Correct after client receives

6. Sacrifice

   • Cash expeditures
     • Short term & registered in accounting
   • Costs of opportunity
     • Decision that forces to give up another alternative
   • Virtual costs
     • Impact on profit w/o representing a cash expenditure (eg. Depreciation)

7. Other

   • Submerged
     • Long term impact
   • Controllable
     • Able to alter behavior
   • Avoidable
     • Cost saving measures