CLASSIFICATION OF COSTS(BY NORMALITY)

CLASSIFICATION OF COSTS

By Normality

According to this basis cost may be categorised as follows:

(a) Normal Cost - It is the cost which is normally incurred at a given level of output under the conditions in which that level of output is normally attained.

(b) Abnormal Cost - It is the cost which is not normally incurred at a given level of output in the conditions in which that level of output is normally attained. It is charged to Costing Profit and loss Account.