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 ?
Washington State DOT (WSDOT) has created a multifaceted process to improve cost estimates and address risk assessment, called the Cost Estimate Validation Process (CEVP[TM]).
Computing management has the option to use the cost estimate to evaluate estimators, developers, and others involved in the project.
However, programs executing successfully are also subjected to budget cuts during the budgeting cycle of PPBE that cause them to be underfunded compared to the best available cost estimate, even when the DAE has directed budgeting to that estimate at the most recent milestone.
While there are many services and products that the BFM can provide, the ones that have the potential to make or break a program are realistic cost estimates, appropriated funds to support contract awards, and proper and timely obligation and expenditure of those funds.
At the beginning of the 21st century, problems with cost-estimate accuracy, a history of cost growth, and high visibility have caused DoD program managers to seek more detailed cost estimates with frequent updates.
A precise cost estimate guarantees that the actual costs are not missing or duplicated.
GAO's independent cost estimate suggests that the total one-time cost of homeporting a nuclear-powered aircraft carrier at Naval Station Mayport is expected to be between $258.
Many times, the vagaries of the project ahead prices architectural work on a percentage (7 percent) of either the final construction cost or the preliminary construction cost estimate, as determined by the agreement.
However, the cost estimate for the project has been increased by some 10% over the earlier budget of EUR532m.
However, because the prescription drug benefit does not kick in until January 2006, the administration argues that the $724 billion cost estimate for 2006-2015 should not be compared to the $534 billion cost estimate for 2004-2013.
A study in progress by the Los Angeles Metropolitan Transportation Authority said the freeway's geography and the number of ingress/egress points are key reasons for the increased cost estimate for lanes that could funnel commuter traffic south on weekday mornings and north in the evenings.

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