Question

Identify and describe cost behaviour characteristics for the different cost elements of a product or service

Answer 1

	COST BEHAVIOUR IS THE CHARACTER OF THE RELEVANT COST WITH THE CHANGES IN SITUATIONS
	COST MAY FLCTUATE WITH THE CHANGES IN THE NUMBER OF UNITS PRODUCED OR SERVICESE RENDERED.
	IT MAY CHANGES WITH THE PASSAGE OF TIME OR WE CAN SAY THAT IF PERIOD INCREASE, SOME COSTS GETS INCREASED
	SOMETIMES IT MAY CHANGE WITH THE CHANGES IN THE CAPACITY OF THE MANUFACTURING OR STORAGE UNITS.
	GENERALLY COST OF THE PRODUCT OR SERVICES INCLUDES FOLLOWING COST.
	NAME OF THE COST	NATURE OF THE COST
	DIRECT MATERIAL	VARIABLE COST	INCREASE OR DECREASE IN SAME PROPORTION WITH THE INCREASE OR DECREASE IN NO. OF UNITS PRODUCED OR SERVICES PERFORMED
	DIRECT LABOR	VARIABLE COST	INCREASE OR DECREASE IN SAME PROPORTION WITH THE INCREASE OR DECREASE IN NO. OF UNITS PRODUCED OR SERVICES PERFORMED
	DIRECT EXPENSES RELATING TO PRODUCTION OR SERVICES	VARIABLE COST	INCREASE OR DECREASE IN SAME PROPORTION WITH THE INCREASE OR DECREASE IN NO. OF UNITS PRODUCED OR SERVICES PERFORMED
	OVERHEADS COST RELATING TO MANUFACTURING ACTIVITY OR SERVICE PROVIDING LIKE-
	RENT	FIXED EXPENSES	IT CHANGES WITH THE INCREASE IN PERIOD, OR WITH INCREASE IN CAPACITY
	ELECTRICITY	SEMI VARIABLE	SOME PROPORTION IS FIXED WHILE OTHER COST INCREASE WITH THE INCREASE IN ACTIVITY LEVELS
	REPAIRS AND MAINTENANCE	SEMI VARIABLE	SOME PROPORTION IS FIXED WHILE OTHER COST INCREASE WITH THE INCREASE IN ACTIVITY LEVELS
	PRODUCTION MANAGER SALARY AND INDIRECT WAGES	FIXED EXPENSES	IT IS FIXED FOR A PARTICUALR PERIOD IRREVANT TO THE LEVEL OF ACTIVITY PERFORMED. IT CHANGES WITH THE INCREASE IN PERIOD.
	OVERHEADS COST RELATING TO ADMINISTRATION
	ADMIN EXPENSES	FIXED	IT IS FIXED FOR A PARTICUALR PERIOD IRREVANT TO THE LEVEL OF ACTIVITY PERFORMED. IT CHANGES WITH THE INCREASE IN PERIOD.
	SELLING OVERHEADS RELATING TO PRODUCT OR SERVICES
	ADVERTISEMENT EXPENSE	SEMI VARIABLE	SOME PROPORTION IS FIXED WHILE OTHER COST INCREASE WITH THE INCREASE IN ACTIVITY LEVELS
	DELIVERY AND TRANSPORTATION	SEMI VARIABLE	SOME PROPORTION IS FIXED WHILE OTHER COST INCREASE WITH THE INCREASE IN ACTIVITY LEVELS
	SELLING COMMISSION	VARIABLE COST	INCREASE OR DECREASE IN SAME PROPORTION WITH THE INCREASE OR DECREASE IN NO. OF UNITS SOLD OR SERVICES PERFORMED
	SALES MANAGER SALARY	FIXED EXPENSES	IT IS FIXED FOR A PARTICUALR PERIOD IRREVANT TO THE LEVEL OF ACTIVITY PERFORMED. IT CHANGES WITH THE INCREASE IN PERIOD.