XII UNIT–6 PACKAGE TOUR COSTING (english)
6.1 Meaning of Cost Definition of Cost: Cost refers to the total monetary value of resources used for acquiring goods or services to achieve a specific objective. Simple Explanation: Cost is the amount spent (actual or estimated) on purchasing services or producing goods. Key Points: It includes both actual and notional (estimated) expenses. It is always measured in monetary terms . It helps in managerial decision-making . Cost is related to value creation or value addition . It does not include profit or distribution of income . Example : A tour operator spends money on hotel bookings, transport, and guides—this total spending is called cost . Types of Cost 1. Fixed Cost Costs that do not change with the number of tourists. Example: Office rent, staff salaries. 2. Variable Cost Costs that vary with the number of tourists . Example: Food, tickets, hotel charges per person. 3. Direct Cost Costs directly related to a specific tour. Example: Hotel booking for a group, transport ...