COST

COST

1. It is a value or result, whose magnitude depends on the amount of resource used in production / acquisition of the good or service.

   • Clasification
     • By type
       • • raw materials and other supplies
         • • external services
           • • direct labor and / or indirect
             • • amortization, which is the cost resulting from fixed assets used in production.
               • • financial, from the use of external financial resources.
                 • • opportunity costs, which are costs incurred for not having attended an available alternative investment or also the value of the best option unrealized
                   • • indirect manufacturing costs
     • According to the allocation of factors to products
       • • Direct costs. Direct costs are characterized by their calculation can be assigned with certainty to a product.
         • • Indirect costs. Indirect costs are affected globally and as can be directly assigned to a product must be previously distributed through the box called primary cost sharing.
     • Cost allocation
       • are assigned to the different sections or departments of the company, such as purchasing department, production department, management department, sales department and financial, etc. When it is not known exactly which department allocate a certain cost, it will be taken by default to the administration
     • Fixed and variable
       • • .Variable cost, as the name reflects those costs that vary pace with production, as an example we would say that the cost arising from the consumption of water in a soda factory is clearly a variable cost basis
         • • Fixed costs, these costs are borne by companies so independent of the quantity produced, consequently the cost no increases when the quantity produced, nor low when it does the quantity produced and even in the extreme case we must support them even if the quantity produced is zero
     • Cost Formulation
       • • Basic cost or direct = Consumption of raw materials + labor + direct energy work + Other Direct Costs
         • • Industrial Cost = Direct Cost + industrial + indirect general cost of hand character of indirect labor manufacturing
           • • Industrial operating cost = cost + general administration costs and sales + indirect labor administration and sales
             • • Insurance holding company = Cost + financial costs