Cost – one of the main characteristics that is used in economic analysis to assess the effectiveness of the company.
The cost is the cost of the enterprise on manufacture and realization of one unit of output. These expenses include the materials used, energy consumed, depreciation of fixed assets, compensation of employees, overhead.
Cost comprises the cost of production and overhead, the magnitude of which depend on the profitability of production and the profit. In the calculation of the allowance takes into account the taxes to be paid, and the amount of profit, the company needed to further development. The cost can be expressed both in physical units and in monetary form.
The price of goods is the cost of the manufacturer during the manufacturing process of the product plus the profit of the seller from its implementation. The price is a certain amount of money that the buyer must pay the seller.
Comparing the concepts of cost, value and price, we can conclude that one follows from the other. The price is calculated on the basis of cost, and the cost cannot be calculated without taking into account the cost of production. The cost is a simple concept while price is a complex.
The cost is expenses of the enterprise for production and marketing of products. If we Express these costs in monetary terms and add on a percentage of the profits from product sales, will the price of the goods. Thus, the cost is part of the price of goods, but not Vice versa. Therefore it is incorrect to sound the question, how much is a product, because in this case the question is only about cost of the manufacturer without taking into account the expected profit. The cost of production in the process of production does not change, if we are talking about a small period of time.
Product price depends on cost and is expressed only in monetary form. The price is not constant, as the size of the margin may vary depending on external factors. These factors include, a holiday event or seasonal sales, the demand for the product, the need to urgently implement a large consignment of goods.
The differences between price, value, and cost
The cost is the cost of the enterprise on manufacture and realization of one unit of output. These expenses include the materials used, energy consumed, depreciation of fixed assets, compensation of employees, overhead.
Cost comprises the cost of production and overhead, the magnitude of which depend on the profitability of production and the profit. In the calculation of the allowance takes into account the taxes to be paid, and the amount of profit, the company needed to further development. The cost can be expressed both in physical units and in monetary form.
The price of goods is the cost of the manufacturer during the manufacturing process of the product plus the profit of the seller from its implementation. The price is a certain amount of money that the buyer must pay the seller.
Comparing the concepts of cost, value and price, we can conclude that one follows from the other. The price is calculated on the basis of cost, and the cost cannot be calculated without taking into account the cost of production. The cost is a simple concept while price is a complex.
Comparison of value and price
The cost is expenses of the enterprise for production and marketing of products. If we Express these costs in monetary terms and add on a percentage of the profits from product sales, will the price of the goods. Thus, the cost is part of the price of goods, but not Vice versa. Therefore it is incorrect to sound the question, how much is a product, because in this case the question is only about cost of the manufacturer without taking into account the expected profit. The cost of production in the process of production does not change, if we are talking about a small period of time.
Product price depends on cost and is expressed only in monetary form. The price is not constant, as the size of the margin may vary depending on external factors. These factors include, a holiday event or seasonal sales, the demand for the product, the need to urgently implement a large consignment of goods.
