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 ?
While quality bears no consistent relationship to cost, the reverse is not true.
Other keys to cost reduction include enabling Web-based supplier self-service, centralizing the vendor master file, and automating workflow for electronic or imaged invoices.
472-8(e)(2)(iii) does not sanction the use of FMV as the basis of inventory; it refers to cost.
482-7(d)(1) defines the costs subject to cost sharing as all costs incurred by a participant related to the intangible development area, plus aU of the cost-sharing payments it makes to other controlled and uncontrolled participants, less all of the cost-sharing payments it receives from other controlled and uncontrolled participants.
0 enables engineering organizations and their supply chains to take a multidisciplinary approach to cost assessment early in product design.
These regulations alone are estimated to cost more than $5 billion just to retool refineries which means an increase in gasoline costs of between 12 and 16 cents a gallon.