AskDefine | Define cost

Dictionary Definition

cost

Noun

1 the total spent for goods or services including money and time and labor
2 the property of having material worth (often indicated by the amount of money something would bring if sold); "the fluctuating monetary value of gold and silver"; "he puts a high price on his services"; "he couldn't calculate the cost of the collection" [syn: monetary value, price]
3 value measured by what must be given or done or undergone to obtain something; "the cost in human life was enormous"; "the price of success is hard work"; "what price glory?" [syn: price, toll]

Verb

1 be priced at; "These shoes cost $100" [syn: be]
2 require to lose, suffer, or sacrifice; "This mistake cost him his job"

User Contributed Dictionary

English

Etymology

From coster (modern: coût).

Pronunciation

Noun

  1. Amount of money, time, etc. that is required or used.
  2. A negative consequence or loss that occurs or is required to occur.

Translations

amount of money, time, etc.
  • Chinese:
    Mandarin: (fèiyòng), (chéngběn)
  • Czech: náklad
  • Finnish: hinta, kustannus
  • German: Kosten
  • Greek: κόστος, δαπάνη, τίμημα, αντίτιμο
  • Hebrew: עלות ('alut)
  • Italian: costo, spesa
  • Japanese: 費用 (ひよう, hiyō)
  • Kurdish: ,
  • Novial: kosto
  • Portuguese: custo
  • Spanish: costo
  • Swedish: kostnad
negative consequence or loss
  • Chinese:
    Mandarin: (dàijìa)
  • Finnish: hinta
  • German: Verlust, Ausgaben
  • Greek: κόστος
  • Novial: kosto
  • Spanish: costo
  • Swedish: kostnad

Verb

  1. To incur a charge, a price.

Translations

to incur a charge, a price
  • Chinese:
    Mandarin: (huāfèi)
  • Czech: stát
  • Dutch: kosten
  • Finnish: maksaa
  • French: coûter
  • German: kosten
  • Greek: κοστίζω [ko̞ˈstizo̞] (means also "to cause damage or distress"), στοιχίζω [stiˈçizo̞] (means also "to inflict" and "to align"), τιμώμαι [tiˈmo̞me̞], κάνω [ˈkano̞] [colloquial (has a huge number of meanings, one of them is "to cost")]
  • Indonesian: menghabiskan biaya
  • Italian: costare
  • Japanese: 費やす (ついやす, tsuiyasu)
  • Polish: kosztować
  • Spanish: costar
  • Swedish: kosta

Extensive Definition

In economics, business, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production.
Costs are often further described based on their timing or their applicability.

Accounting vs opportunity costs

In accounting, costs are the monetary value of expenditures for supplies, services, labor, products, equipment and other items purchased for use by a business or other accounting entity. It is the amount denoted on invoices as the price and recorded in bookkeeping records as an expense or asset cost basis.
Opportunity cost, also referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavour—i.e., what could have been accomplished with the resources expended in the undertaking. It represents opportunities forgone.
In theoretical economics, cost used without qualification often means opportunity cost.

Comparing private, external, social, and psychic costs

When a transaction takes place, it typically involves both private costs and external costs.
Private costs are the costs that the buyer of a good or service pays the seller. This can also be described as the costs internal to the firm's production function.
External costs (also called externalities), in contrast, are the costs that people other than the buyer are forced to pay as a result of the transaction. The bearers of such costs can be either particular individuals or society at large. Note that external costs are often both non-monetary and problematic to quantify for comparison with monetary values. They include things like pollution, things that society will likely have to pay for in some way or at some time in the future, but that are not included in transaction prices.
Social costs are the sum of private costs and external costs.
For example, the manufacturing cost of a car (i.e., the costs of buying inputs, land tax rates for the car plant, overhead costs of running the plant and labour costs) reflects the private cost for the manufacturer (in some ways, normal profit can also be seen as a cost of production; see, e.g., Ison and Wall, 2007, p. 181). The polluted waters or polluted air also created as part of the process of producing the car is an external cost borne by those who are affected by the pollution or who value unpolluted air or water. Because the manufacturer does not pay for this external cost (the cost of emitting undesirable waste into the commons), and does not include this cost in the price of the car (a Kaldor-Hicks compensation), they are said to be external to the market pricing mechanism. The air pollution from driving the car is also an externality produced by the car user in the process of using his good. The driver does not compensate for the environmental damage caused by using the car.
A psychic cost is a subset of social costs that specifically represent the costs of added stress or losses to quality of life.

Cost estimates and cost overrun

When developing a business plan for a new company, product, or project, planners typically make cost estimates in order to assess whether revenues/benefits will cover costs (see cost-benefit analysis). This is done in both business and government. Costs are often underestimated resulting in cost overrun during implementation. Main causes of cost underestimation and overrun are optimism bias and strategic misrepresentation (Flyvbjerg et al. 2002). Reference class forecasting was developed to curb optimism bias and strategic misrepresentation and arrive at more accurate cost estimates.
Cost Plus, is where the Price = Cost plus or minus X%, where x is the percentage of built in overhead or profit margin.

Path cost

Also seen as a term in networking to define the worthiness of a path.

Biological cost

In biology, the biological cost or metabolic price is a measure of the increased energy metabolism that is required to achieve a function. Drug resistance in microbiology, for instance, has a very high metabolic price, especially for antibiotic resistance

References

  • William Baumol (1968), Entrepreneurship in Economic Theory. American Economic Review, Papers and Proceedings.
  • Søren L. Buhl (2002), "Underestimating Costs in Public Works Projects: Error or Lie?" Journal of the American Planning Association, vol. 68, no. 3, 279-295.]
  • [http://flyvbjerg.plan.aau.dk/JAPAASPUBLISHED.pdf Bent Flyvbjerg, Mette K. Skamris Holm, and
  • Stephen Ison and Stuart Wall (2007), Economics, 4th Edition, Harlow, England; New York: FT Prentice Hall.
  • Israel Kirzner (1979), Perception, Opportunity and Profit, Chicago: University of Chicago Press.

See also

cost in Welsh: Cost
cost in German: Kosten
cost in Spanish: Gasto
cost in Finnish: Kustannus
cost in French: Coût
cost in Hebrew: עלות
cost in Hungarian: Költség
cost in Indonesian: Biaya
cost in Italian: Costo
cost in Japanese: 費用
cost in Dutch: kosten (financieel)
cost in Portuguese: Custo
cost in Russian: Затраты
cost in Simple English: Cost
cost in Thai: ต้นทุน
cost in Turkish: Maliyet
cost in Chinese: 成本

Synonyms, Antonyms and Related Words

afford, amount, amount to, bereavement, bring, bring in, budget, budget items, burden of expenditure, carrying charge, charge, charges, come to, come up to, cost of living, cost out, cost-of-living allowance, cost-of-living index, costs, damage, dead loss, debit, denial, denudation, deprivation, despoilment, destruction, detriment, direct costs, disbursals, disburse, dispossession, distributed costs, divestment, expend, expenditure, expense, expense account, expenses, fetch, figure, forfeit, forfeiture, fork out, general expenses, get, go through, incur costs, indirect costs, injury, invest, labor costs, lay out, liabilities, loser, losing, losing streak, loss, material costs, mount up to, open the purse, operating costs, operating expense, outlay, overhead, pay, pay out, payment, perdition, price, price tag, prime cost, privation, put out, rate, replacement cost, robbery, ruin, run into, run through, run to, sacrifice, schedule, score, sell for, set one back, shell out, sink money in, spend, splurge, spoliation, squander, stripping, swindle sheet, tab, taking away, tariff, throw money around, total loss, total up to, unit cost
Privacy Policy, About Us, Terms and Conditions, Contact Us
Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2
Material from Wikipedia, Wiktionary, Dict
Valid HTML 4.01 Strict, Valid CSS Level 2.1