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Name: I Putu Gede Indra Mahardika Phone: 0813-3981-3577 Personality: Mediator (INFP-T)

Name : I Putu Gede Indra Mahardika Phone : 0813-3981-3577 Personality : Mediator (INFP-T)

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95 views

Name: I Putu Gede Indra Mahardika Phone: 0813-3981-3577 Personality: Mediator (INFP-T)

Name : I Putu Gede Indra Mahardika Phone : 0813-3981-3577 Personality : Mediator (INFP-T)

Uploaded by

Tya Nws
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Name : I Putu Gede Indra Mahardika

Phone : 0813-3981-3577
Personality : Mediator (INFP-T)

1
Definition of Cost Management

Cost management is concerned with assigning costs and using information for planning, controlling, continuous

improvement, and decision making. It encompasses cost

accounting and management accounting but has a broader focus than the usual roles assigned to cost accounting and

management accounting. Cost management broadens this focus by emphasizing accuracy of assignments based on

causal relationships and also by emphasizing continuous improvement and expanding planning, control, and decision

making to include such factors as processes, value chain, life cycle analyses, strategic considerations, and

environmental costs.
Classification of Cost

By nature or traceability
Direct costs and indirect costs. Direct costs are directly attributable/traceable to cost objects, while indirect costs (not
being directly attributable) are allocated or apportioned to cost objects.
By function
Production, administration, selling and distribution, or research and development.
By behavior
Fixed, variable, or semi-variable. Fixed costs remain unchanged irrespective of changes in the production volume over a
given period of time. Variable costs change according to the volume of production. Semi-variable costs are partly fixed
and partly variable.
By controllability
Controllable costs are those which can be controlled or influenced by
conscious management action. Uncontrollable costs cannot be controlled or
influenced by conscious management action.
By normality
Normal costs and abnormal costs. Normal costs arise during routine day-to-
day business operations. Abnormal costs arise because of any abnormal
activity or event not part of routine business operations, such as accidents or
natural disasters.
By time
Historical costs and predetermined costs. Historical costs are costs incurred
in the past. Predetermined costs are computed in advance on basis of factors
affecting cost elements.
By decision-making costs
These costs are used for managerial decision making:

• Marginal costs: The marginal cost is the change in total cost caused by increasing or decreasing output by one unit.
• Differential costs: This cost is the difference in total cost resulting from selecting one alternative over another.
• Opportunity costs: The value of a benefit sacrificed in favour of an alternative course of action.
• Relevant cost: The relevant cost is a cost which is relevant in various decisions of management.
• Replacement cost: This cost is the cost at which existing items of material or fixed assets can be replaced at present or at a
future date.
• Shutdown cost: Costs incurred if operations are shut down, and which would not occur if operations are continued.
• Capacity cost: The cost incurred by a company for providing production, administration and selling and distribution capabilities
in order to perform various functions. These costs are normally fixed costs.
• Sunk cost: A cost already incurred, which cannot be recovered.
• Other costs

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