Basic cost elements are:1. Raw materials
2. Labor
3. Indirect expenses/overhead
1.Material (Material is a very important part of business)
• Direct material/Indirect material
2. Labor
• Direct labor/Indirect labor
3. Overhead (Variable/Fixed)
• Production or works overheads
• Administration overheads
• Selling overheads
• Distribution overheads
• Maintenance & Repair
• Supplies
• Utilities
• Other Variable Expenses
• Salaries
• Occupancy (Rent)
• Depreciation
• Other Fixed Expenses
(In some companies, machine cost is segregated from overhead and reported as a separate element)