est of mat cost
Wood for Furniture, Steel for bolts etc… are the examples of
Direct material cost:
allowance is nearly 5% of the total working time.
Personal allowance or fatigue allowance
Direct material cost + Direct labour cost + Direct expenses
method of costing under which all costs are accumulated for each stage of production or process, and the cost per unit of product is ascertained at each stage of production by dividing the cost of each process by the normal output of that process is called
an offer which incorporates the sum of money, time and other conditions required to carry out the contract obligations in order to complete a project or part of it consisting of specified work.
In addition to direct materials a number of other materials are necessary to help in the conversion of direct materials into final shape.these are called
Indirect material cost:
A worker cannot work for full time with the same speed. After some time, He feels some tiredness due to excessive work, poor lighting, machine noise etc. These leads to
Factory cost + Administrative expenses
payments made by the employer for the efforts put in by the worker in production of articles.
the complete tendering process from the advertising of the requirement through to the placing of the contract. This includes the exchange of all relevant documents in electronic format.
The volume of component multiplied by the density of material used gives
weight of the material per component.
expenses include cost of special jigs or fixtures, patterns, toolings made for job, or cost of research and development work done for that specific job. are called
Prime cost + Factory expenses
method of recording the cost of manufacturing job, rather than process
manual paper based tendering process.
one who actually works and processes the materials to convert it into the final shape is
In addition to indirect material and indirect labour cost it includes rent of factory building, license fee, electricity and telephone bills of factory, insurance charges etc.
Total cost + Profit
value of an asset as recorded in the company’s books or financial reports.
a business tool widely used across all industries to evaluate business performance in terms of costs, since it helps the business determine the cost structures, and the number of units that need to be sold in order to make a profit.
supervisors, inspectors, foreman, storekeeper, gatekeeper, maintenance staff, crane driver etc. are
It includes the salaries of office and administrative staff, rent of office building, postage and telephone charges, water and electricity charges for office, Director’s fee, legal and audit charges etc.
(Total overheads/Prime cost )*100
Percentage on prime cost
NPV is positive and project is acceptable, it means a better returns i,e profit.
Present value of cash inflow > Present value of cash outflow
angle between sales line and Total cost line
Angle of Incidents