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Present several different types of costs that are used in co

Present several different types of costs that are used in cost accounting, please discuss why you think it is important for companies to identify and track these costs differently. Please use an example to support your assertions.

Please discuss how a company may also evolve their cost accounting and cost tracking over time.

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There are several different types of costs that are used in cost accounting. Discuss why you think it is important for companies to identify and track these costs differently. Please use an example to support your assertions.

The main types of costs are:
DIRECT COST: Those costs going into the product, such as raw materials and the labor that makes the product they will sell.
INDIRECT COSTS: Those costs that support the production, such as the facility cost, training, scheduling, utilities, hiring, maintenance, clean up and so forth.
VARIABLE COSTS: Those costs that vary with activity. These costs go up and down as activity increases or decreases. Examples are raw materials, direct labor, oil used to heat the ovens for ...

Solution Summary

The response discussed the four main types of costs in everyday language suitable for novice (505 words). Practical reasons for tracking costs are discussed.

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