Question

Discuss any five costs other than the accounting costs, with suitable example, which are usually taken into consideration by managers for financial decision making.

if possible, describe in more than 300 words.

Answer 1

Answer:-

1) Marginal Costing- Through this method, Only the variable cost is allocated i.e direct material, direct expenses, direct labour and variable overheads.

2) Absorption Costing- It is the technique to absorb the fixed and variable cost to production

3) Standard Costing- It is the technique where costing standard are set and then on the basis of that standard cost allocation is being done by identifying variances

4) Historical Costing- It is a technique where costing is done on the basis of past standard set of any product or service

5) Fixed and Variable Cost- Fixed cost are the cost which are fixed in nature and don't vary with the change in Production capacity. Variable cost are the cost which fluctuates with the change in level of Production. i.e if Production increases costing Increases and if production decreases costing decreases.