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In marketing, carrying cost, carrying cost of inventory or holding cost refers to the total cost of holding inventory. This includes warehousing costs such as rent, utilities and salaries, financial costs such as opportunity cost , and inventory costs related to perishability, shrinkage , and insurance. [ 1 ]
For example, a US investor buying a Standard and Poor's 500 e-mini futures contract on the Chicago Mercantile Exchange could expect the cost of carry to be the prevailing risk-free interest rate (around 5% as of November, 2007) minus the expected dividends that one could earn from buying each of the stocks in the S&P 500 and receiving any ...
Cost of goods sold (COGS) is the carrying value of goods sold during a particular period.. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost.
Carried interest, or carry, in finance, is a share of the profits of an investment paid to the investment manager specifically in alternative investments (private equity and hedge funds). It is a performance fee , rewarding the manager for enhancing performance. [ 3 ]
An important part of standard cost accounting is a variance analysis, which breaks down the variation between actual cost and standard costs into various components (volume variation, material cost variation, labor cost variation, etc.) so managers can understand why costs were different from what was planned and take appropriate action to ...
The cost driver is a factor that creates or drives the cost of the activity. For example, the cost of the activity of bank tellers can be ascribed to each product by measuring how long each product's transactions (cost driver) take at the counter and then by measuring the number of each type of transaction.
Inventory management software is a software system for tracking inventory levels, orders, sales and deliveries. [1] It can also be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid product overstock and outages.
An operating expense (opex) [a] is an ongoing cost for running a product, business, or system. [1] Its counterpart, a capital expenditure (capex), is the cost of developing or providing non-consumable parts for the product or system.