CIMA P1 Syllabus A. Cost Accounting For Decision And Control - Different Elements Of Production Cost - Notes ^{4 / 7}

Costs can be classified by element:

1. materials

2. labour

3. overheads (expenses)

This includes all costs of materials purchased for production or non-production activities

e.g. raw materials and components.

This includes all staff costs relating to employees.

Overheads include all other costs which are not materials or labour.

These include factory rent, telephone, and depreciation of equipment.