Everything you need to know about the classification and types of cost. Cost classification is the process of grouping costs according to their common characteristics. It is the placement of like items together according to their common characteristics. A suitable classification of costs is of vital importance in order to identify the cost with cost centres or cost units. Cost [...]
In this article we will discuss about the classification of profit and loss account ratios in accounting. They are:- 1. Gross Profit Ratio 2. Operating Ratios 3. Expenses Ratio 4. Net Profit Ratio. 1. Gross Profit Ratio: The Gross Profit Ratio is also known as Gross Margin Ratio, Trading Margin Ratio etc. It is expressed as a "Per Cent Ratio." [...]
The upcoming discussion will update you about the differences between fixed budget and flexible budget. Difference # 1. Fixed Budget: 1. Costs are not classified according to their variability, i.e., fixed, variable and semi- variable. 2. Fixed budget is inflexible and remains the same irrespective of the volume of business activity. 3. Fixed budget assumes that conditions would remain static. [...]