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During the production process, the actual monetary expenditure made by the company is the money cost of production. Cost Concept includes each and every business expenses which are involved in the outlay of money in support of the business operations which is explained in details in Cost Concept Relating to Income Measurement Assignment Help. Money cost and Real cost are included in the Cost Concept. Unlike money cost, real cost May or may not involve the actual monetary expenses. However, it includes all the business’s or company’s expenses excepting the actual monetary expenditures. When the business expenses like depreciation, taxes, various direct and indirect business overheads, wages, cost of raw materials, salaries etc are deducted from the sales income of any firm, we obtain the accounting profit. Inclusion of all such business expenses which are recorded in the account’s book of a business firm as acceptable business expenses is known as accounting cost. In case there is a damage caused by the business firm or individual to the society at a whole, the expenses of the damage is known as social cost. The cost which is obtained on dividing the total cost with number of units produced is known as average cost.Cost Concept Relating to Income Measurement Assignment Help explains that in order to understand the business operations and for better understanding of the cost involved in business operations of the firms, various cost concepts are taken into considerations.
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Categories of Cost Concept Relating to Income Measurement
The Cost Concept Relating to Income Measurement is categorized into five basic sub – categories which is explained in details by Cost Concept Relating to Income Measurement Assignment Help.
1. Period Cost: – Whenever the sum of the cost of a particular period is subtracted as expenditure from the generated revenue of current period, the Period Cost is matched in opposition to revenue for the current period.
2. Cost of Product: – Cost of Products is the cost which is recognized by the goods or items that are either produced or purchased with an intention for re – sale. These costs vary according to the variation of production of goods. Cost of product is explained thoroughly in Cost Concept Relating to Income Measurement Assignment Help.
3. Cost that is expired: – Cost that is expired explains that the cost cannot be used in future for any production of revenues.
4. Planning of Profit: – Planning of profit exactly explains the process of making decisions with many back – up plans. Planning of Profit understands that the future costs play a very important role in figuring out the profit for a company.
5. The Unexpired Cost: – The unexpired cost or the cost that is unexpired deals with the cost which is involved or which contributes for generating the revenues.
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