For the sake of your business progress, there’s no harm in taking a moment to understand the types of costs and their management.
If the expenditure of these costs is not controlled or difficult to control, then not the profit that will be obtained but the loss.
Then know, understand and manage these types of costs appropriately so that your business becomes truly efficient and profitable.
Types of Business Management Costs
There are 7 main types of costs in business, namely:
1. Controllable Cost
2. Costs that cannot be controlled (Uncontrollable Cost)
3. Programmed Cost
4. Commited Cost or Capacity Cost
5. Avoidable and Unavoidable Cost
6. Imputed Cost and Sunk Cost
7. Opportunity Cost (Opportunity Cost)
Let’s explore one by one …
# 1. Controllable Cost
Notions of controlled are costs that are at a certain management level or which can be directly influenced by certain managers.
Generally variable costs can be controlled and vice versa fixed costs.
But if it is associated with a cost center, then all costs that are the responsibility of the relevant center are controllable.
So that these costs can really be controlled, then as a guideline:
- If certain managers have authority in