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The concept of direct and indirect cost is of basic importance in costing. Costs which are easily and directly allocated to products or units are termed as direct cost. ... In the process of manufacturing of a product, materials are purchased, wages are paid to labour, and certain other expenses are also incurred directly.What are the five cost concepts?
Besides the concept of opportunity cost, there are several other concepts of cost namely fixed costs, explicit costs, social costs, implicit costs, social costs, and replacement costs. Hence there are several different types of concepts of cost, which have been discussed in the following.What is the basic concept of cost concepts?
The cost concept demands all assets to be recorded in the books of accounts of the prices at which they were bought. This involves the cost incurred for transportation, installation, and acquisition. ... The word 'cost' is also known as 'money cost', which is linked with the capital expenditure of a company.
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