cost

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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 periodicals archive ?
THE OPTIMAL PRIZE STRUCTURE WITH COSTLESS PUNISHMENTS
On average, first-period offers from the buyer-offer with costless delay treatment were $2.
Hypothesis 2: Costly signals will improve group coordination more than costless, non-binding signals.
If side payments are not costless or allowable, allocating a quota asymmetrically may still be of benefit to firms if they operate in multiple markets.
The passage of GATT and NAFTA offers multinationals endless opportunities to beggar workers, rights with the threat of a costless move to cheap-labor countries.
If we cannot accomplish this identification, or if such risks are deemed more pervasive, then applying low-cost or even costless agronomic practices over large areas of cropped acreage would clearly be more cost-effective.
A second objection is that hedging the foreign exchange exposure is not a costless activity.
Carol Cox, president of the watchdog Committee for a Responsible Federal Budget, warns, "You can't have a separate class of expenditures that we pretend is costless.
As will be seen below, such earnings crossmatches are extremely powerful in their applications and also almost costless to implement.
However, ensuring the successful transition from noncompetitive to competitive employment is not costless.
Specifically, the amount of fuel hedged has been reduced from approximately 80% to 60% of fuel-price-related earnings exposure, while maintaining the use of a costless collar.