cost


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Related to cost: cost accounting, cost analysis, fixed cost

Cost

The opposite of revenue. An expense that reflects the price of purchasing goods, services and financial instruments. A cash cost means that cash is given up today to the purchase. Also, the purchase price of an investment, which is compared to the sale proceeds to determine capital gain or loss.

Cost

The amount of money or property paid for a good or service. Cost is an expense for both personal and business assets. If a cost is for a business expense, it may be tax deductible. A cost may be paid immediately in the form of cash or over time in a credit sale or similar transaction. Cost is the opposite of revenue: It may be thought of as money spent instead of made.

cost

The expenditure of funds or use of property to acquire or produce a product or service. See also average cost, fixed cost, historical cost, marginal cost, replacement cost, variable cost.

cost

the expenditure upon resources incurred by a firm in producing and selling its output. Each cost is a charge against revenues and profits for the use or consumption of resources during a trading period. (see PROFIT AND LOSS ACCOUNT). Costs can be classified along functional lines, distinguishing between production, selling, distribution, administration and financing costs. Alternatively costs can be classified as either direct costs (usually raw materials and direct labour) or indirect costs (overheads) (see PROFIT AND LOSS ACCOUNT). Costs may also be classified as variable costs and fixed costs, depending on whether they vary with the level of output or activity. In addition, costs may be analysed by product. Finally costs may be classified by location (division, subsidiary, company, department, etc.).

Classification and analysis of costs is necessary for three main business purposes:

  1. for product costing;
  2. for management control;
  3. for decision-making.

Identification and classification of these costs is the core of MANAGEMENT ACCOUNTING. Fig. 28 shows the build up of major cost elements. See PRODUCTION COST, SELLING COST.

cost

the payments (both EXPLICIT COSTS and IMPLICIT COSTS) incurred by a firm in producing its output. See TOTAL COST, AVERAGE COST, MARGINAL COST, PRODUCTION COST, SELLING COST.

Cost

Cash and/or the value of property given to acquire the property received.
References in classic literature ?
This system may have cost from twenty to fifty millions, yet it may be hired for one-eighth the cost of renting an automobile.
It cost a napoleon, madame, and was made expressly for myself.
said the sparrow; 'thy cruelty shall cost thee they life yet
In the fall of 1872 I determined to make an effort to get there, although, as I have stated, I had no definite idea of the direction in which Hampton was, or of what it would cost to go there.
It'll cost you three thousand for a look in, but nobody will stop you from raising.
Thereupon the Thrifty Person brought an action against the Chief of the Weather Bureau for the cost of the umbrellas.
Deduct the dress and the carriage of Madame before you estimate the gross expenses of the family, for dress precedes everything; then see what remains for the education of the children (a girl of eight and a boy of nine, whose maintenance must cost at least two thousand francs besides) and you will find that Madame Rabourdin could barely afford to give her husband thirty francs a month.
While one thick garment is, for most purposes, as good as three thin ones, and cheap clothing can be obtained at prices really to suit customers; while a thick coat can be bought for five dollars, which will last as many years, thick pantaloons for two dollars, cowhide boots for a dollar and a half a pair, a summer hat for a quarter of a dollar, and a winter cap for sixty-two and a half cents, or a better be made at home at a nominal cost, where is he so poor that, clad in such a suit, of his own earning, there will not be found wise men to do him reverence?
Though Sophia eat but little, yet she was regularly served with her meals; indeed, I believe, if she had liked any one rarity, that the squire, however angry, would have spared neither pains nor cost to have procured it for her; since, however strange it may appear to some of my readers, he really doated on his daughter, and to give her any kind of pleasure was the highest satisfaction of his life.
On week-days her breakfast cost ten cents; she made coffee and cooked an egg over the gaslight while she was dressing.
Now I saw, though too late, the Folly of beginning a Work before we count the Cost, and before we judge rightly of our own Strength to go through with it.
At the present moment (August, 1853) there is a suit before the court which was commenced nearly twenty years ago, in which from thirty to forty counsel have been known to appear at one time, in which costs have been incurred to the amount of seventy thousand pounds, which is A FRIENDLY SUIT, and which is