Common costs

Common cost are the expenses which are not directly traceable, incurred in production, manufacturing or other business activities and the benefits of these expenses are enjoyed by  more than one unit, product, department or the segment of a business. In other words common costs are common to number of item, products or department of a business and can't be allocated to a particular product and department or segment of an organization. For example the salary of a supervisor of production process where number of different products are being produced is common fixed cost because it can't be traceable to an individual product or an individual product is not the cause of that cost