Search results
Results from the WOW.Com Content Network
In common usage, as in accounting usage, cost typically does not refer to implicit costs and instead only refers to direct monetary costs. The economics term profit relies on the economic meaning of the term for cost. While in common usage, profit refers to earnings minus accounting cost, economists mean earnings minus economic cost or ...
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 ...
Shows a firm's Economic Costs in the "Short Run" - which, as defined, contains at least 1 "Fixed Cost" that cannot be changed or done away with even if the firm goes out of business (stops producing) Variable cost: Variable costs are the costs paid to the variable input. Inputs include labor, capital, materials, power and land and buildings.
In economics, a transaction cost is a cost incurred when making an economic trade when participating in a market. [ 1 ] The idea that transactions form the basis of economic thinking was introduced by the institutional economist John R. Commons in 1931.
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.
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 ...
Along with variable costs, fixed costs make up one of the two components of total cost: total cost is equal to fixed costs plus variable costs. In accounting and economics, fixed costs, also known as indirect costs or overhead costs, are business expenses that are not dependent on the level of goods or services produced by the business. They ...