Various Types Of Costs
Posted by Steven in Direct labor Costs, Fixed Costs, Indirect labor costs, Semi Variable Cost, Variable Cost
When budget getting for labor costs, the distinction to keep in mind is between direct & indirect. Direct labor costs are those incurred in any work on products or services that can be tracked readily , such as wages for assembly line workers. Indirect labor 
costs are for activities related to products or service that are not readily tracked, such as salaries for supervisors and support personnel. Both direct & indirect labor costs can be fixed or variable.
Fixed Costs are perhaps the most important costs to remain constant through out and are impervious to the cycle of business.The rent you pay from month to month is fixed costs because it doesn’t vary no matter what your sales patternmight be. To a large degree, salaries also are fixed costs, although they may have variable components in terms of performance bonuses.Utility costs are the same way.Any expenses that remains constant no matter the cycle of business is the fixed cost.
Variable Cost are little different and allow you some budgeting flexibility. These are costs that fluctuate directly with the amount of business you support. Variable costs are costs that are business dependent which include supply of goods and materials and to some degeree, part time labor necessary to keep the business operating aspace with demand.
Semi Variable Costs are expenses with components that are fixed and components that are variable. For example telephone expenses are semi variable cost.So its clear that you can now distinguish and understand various types of costs.
costs are for activities related to products or service that are not readily tracked, such as salaries for supervisors and support personnel. Both direct & indirect labor costs can be fixed or variable.Fixed Costs are perhaps the most important costs to remain constant through out and are impervious to the cycle of business.The rent you pay from month to month is fixed costs because it doesn’t vary no matter what your sales patternmight be. To a large degree, salaries also are fixed costs, although they may have variable components in terms of performance bonuses.Utility costs are the same way.Any expenses that remains constant no matter the cycle of business is the fixed cost.
Variable Cost are little different and allow you some budgeting flexibility. These are costs that fluctuate directly with the amount of business you support. Variable costs are costs that are business dependent which include supply of goods and materials and to some degeree, part time labor necessary to keep the business operating aspace with demand.
Semi Variable Costs are expenses with components that are fixed and components that are variable. For example telephone expenses are semi variable cost.So its clear that you can now distinguish and understand various types of costs.
