The first lecture on the basics of costing was the first lecture of cost
accounting. The lecture will focus on the three elements that is material labor and
expense expenses. all these concepts are going to be used in the next chapters
right. This is the base of the first chapter. the first element is material. The
second element that is important is labor, and the third one is expenses. these
three chapters at the heart of cost accounting because these are the three
important elements of cost.. The direct cost is known as prime cost and the
indirect cost is called overhead cost. any cost which can be identified in the one
unit of the finished good is known as direct cost. For example,. direct cost is a
direct cost of fabric and the cost of pattern. indirect cost is which can not be.
identified in one unit. of. Production that is my indirect cost..
Electricity is being consumed in making one shirt. There are hundreds of shirt
being made together on the machines. There are 10 machines on which 100 of shirts
are being made.. There is a bulb in your room. Say it 's a simple example in your
house in your home. There are say six lights right and your monthly electricity
bill is say ten thousand rupees, six lights and say two ac air conditioners. fixed
cost is which do not change with the change in the level of activity. variable
costs are the cost which change with changes in the change of activity like
commission bonus wage component parts and basic raw materials. For example, we 'll
continue with the same example of that couple who is having a baby, but the rent
will remain same. a baby now earlier their milk consumption was 10 liters a month
right now. With the baby arriving baby will also have the milk now. if you are
producing 1000 shirts and you require 1000 meters of the fabric for 1000 shirts.
Now if you increase the number of shirts to 2000 obviously your raw material that
is your cloth which you were earlier. 1000 meters now you will require 2000 meters.
after two years. If they have another baby, the milk consumption will increase now
with increase in consumption their cost will increase..
The important parts which are going to be used in the further lectures as well as
in the numericals. I have covered that is direct cost, indirect cost, indirect and
fixed cost variable cost. sunk cost sunk cost is any cost which has been incurred
and which will not be recovered like. For example, I want to make a new product
right now before making a product. I do some research on that whether that product
is feasible or not whether it will earn me profits or not. the first chapter that
is basics of costing. I hope you have enjoyed this uh so far right and we 'll
continue it in the same way so with fullon examples and your reallife linkings and
all those things right so what you are what we are going to do in the next lecture
is we'll be starting with chapter number two. Right that is material costing..
accounting. The lecture will focus on the three elements that is material labor and
expense expenses. all these concepts are going to be used in the next chapters
right. This is the base of the first chapter. the first element is material. The
second element that is important is labor, and the third one is expenses. these
three chapters at the heart of cost accounting because these are the three
important elements of cost.. The direct cost is known as prime cost and the
indirect cost is called overhead cost. any cost which can be identified in the one
unit of the finished good is known as direct cost. For example,. direct cost is a
direct cost of fabric and the cost of pattern. indirect cost is which can not be.
identified in one unit. of. Production that is my indirect cost..
Electricity is being consumed in making one shirt. There are hundreds of shirt
being made together on the machines. There are 10 machines on which 100 of shirts
are being made.. There is a bulb in your room. Say it 's a simple example in your
house in your home. There are say six lights right and your monthly electricity
bill is say ten thousand rupees, six lights and say two ac air conditioners. fixed
cost is which do not change with the change in the level of activity. variable
costs are the cost which change with changes in the change of activity like
commission bonus wage component parts and basic raw materials. For example, we 'll
continue with the same example of that couple who is having a baby, but the rent
will remain same. a baby now earlier their milk consumption was 10 liters a month
right now. With the baby arriving baby will also have the milk now. if you are
producing 1000 shirts and you require 1000 meters of the fabric for 1000 shirts.
Now if you increase the number of shirts to 2000 obviously your raw material that
is your cloth which you were earlier. 1000 meters now you will require 2000 meters.
after two years. If they have another baby, the milk consumption will increase now
with increase in consumption their cost will increase..
The important parts which are going to be used in the further lectures as well as
in the numericals. I have covered that is direct cost, indirect cost, indirect and
fixed cost variable cost. sunk cost sunk cost is any cost which has been incurred
and which will not be recovered like. For example, I want to make a new product
right now before making a product. I do some research on that whether that product
is feasible or not whether it will earn me profits or not. the first chapter that
is basics of costing. I hope you have enjoyed this uh so far right and we 'll
continue it in the same way so with fullon examples and your reallife linkings and
all those things right so what you are what we are going to do in the next lecture
is we'll be starting with chapter number two. Right that is material costing..
