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More generalized in the field of economics, cost is a metric that is totaling up as a result of a process or as a differential for the result of a decision. [1] Hence cost is the metric used in the standard modeling paradigm applied to economic processes. Costs (pl.) are often further described based on their timing or their applicability.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
Opportunity cost, as such, is an economic concept in economic theory which is used to maximise value through better decision-making. In accounting, collecting, processing, and reporting information on activities and events that occur within an organization is referred to as the accounting cycle.
In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3]
The equivalent nomenclature in economics is specific cost. [2] Direct costs may be either fixed or variable, but typically comprise materials, labour, and specific expenses such as, e.g. a royalty payment to a patent holder for a given production process, [3] all, directly attributable to a cost object. Thus by industry:
Household final consumption expenditure (POES) is a transaction of the national account's use of income account representing consumer spending.It consists of the expenditure incurred by resident households on individual consumption goods and services, including those sold at prices that are not economically significant.
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". [22] The term is ultimately derived from Ancient Greek οἰκονομία (oikonomia) which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός (oikonomikos), or "household or homestead manager".
Cost accounting is defined by the Institute of Management Accountants as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail.