Kinds of Costs

Direct and Indirect Costs:
Direct costs are those which are identifiable to individual cost centers. It includes direct material, direct labor and direct expenses. It is also called prime cost.Indirect costs on the other hand are not attributable to an individual cost center. It includes indirect material, indirect labor and indirect expenses. These are also known as overheads. Direct costs are charged to trading account and indirect costs to profit & loss accounts.
Fixed, Variable and Semi-variable costs
Fixed costs are those which remain unchanged with the increase or decrease in the level of output e.g. rent of building. Variable costs are those which experience change in direct proportion to the level of output e.g. direct material per unit. Semi-variable costs are those which are partly fixed and partly variable e.g. telephone expenses.
Controllable & Uncontrollable costs:
Controllable costs are those which are within the control of management. Uncontrollable costs are those which are beyond the control of the management.

Normal & Abnormal costs:
Normal costs are those which are incurred in normal conditions at normal level of output. Abnormal costs are those which incur due to abnormal or adverse business conditions, wrong decisions and poor management e.g. loss due to obsolescence, loss by fire etc.
Functional costs:
Costs can be classified on the basis of functions of business. The various business functions include production, administration and selling and thus costs are appropriated on the basis of department incurring these costs.
Capital & Revenue costs:
Capital costs mean the cost on purchase or acquisition of assets for the business the benefit of which is derived by the business in more than one year. The revenue costs on the other hand are those which are related to the current period. Capital costs are the part of Balance Sheet while revenue costs are charged toprofitability statements.