Costs are the negative consequences of an action in the face of a specific plan and decision-making field. Only monetary variables are generally taken into account for simplicity.
- 2.1 Microeconomics
- 2.2 Economics in Accounting
In the Business Administration
Costs are seen economically for the rated consumption of production factors in monetary units (GE), which are necessary for the creation of occupational performance in a billing period. By definition therefore is a business under the ordinary cost, operationally caused evaluated consumption of goods and services a period to understand or in other words the value of the use of goods and services for power generation. The assessment will be in monetary units. The factor consumption can be in the form of goods, services, labor and rights. Costs also taxes are part of the operating costs.
In addition to this value-oriented concept of cost the business theory differs even the pagatorischen (after Helmut Koch and Erich Kosiol ) and the decision-oriented concept of cost (after Paul Riebel ). During the pagatorische cost concept is oriented to ( performance-based ) payments, decision-oriented costs are used to evaluate alternative courses of action, the realization of which would trigger these costs. Unlike the value- cost term purpose is not to opportunity costs are taken into account, as they incorporate best as repressed contribution in the assessment.
Opportunity costs are indeed decision-oriented, but have nothing to do with the decision-oriented costs phrase Paul Riebel. Opportunity costs are only one measurement basis for the level of certain costs and can also be applied within the concept of value-based cost. In contrast, Paul Riebel defines its decision-oriented costs as " the additional triggered by the decision on the object being viewed - uncompensated - expenditure".
Differentiation from other account sizes
Costs and revenue are used as a term pair in internal accounting, namely, in particular in the cost and performance accounting. It should be noted however, that revenue should not be confused with performance. Costs and revenue are accrued against similar pairs of terms as follows:
- Income and expenses form the analogous pair of concepts of financial accounting and to create an annualized profit and loss account used.
- Expenditure and revenue are key concepts of accounting. They arise when something was bought or sold, regardless of whether it has been paid or not. Once payments are made effective, are expenditure and revenue to withdrawals and deposits. Payments and receipts are the basic processing parameters of the dynamic investment calculation and the Treasury. The pairs of terms mentioned overlap largely content. The use of the term depends primarily on the intended purpose statement.
Differences between cost and complexity can arise but for example, if
- Operations are evaluated in different ways, such as imputed depreciation and accounting depreciation (the former represents costs, the latter effort)
- Costs are recognized in the financial accounting have no equivalent ( for example, imputed interest or entrepreneurs wages)
The approach imputed cost elements (eg risk of costs), as well as the conceptual distinction between costs and effort at all, a phenomenon of the German cost theory and has in other countries and languages no equivalent. Thus, the terms in English about cost and expense largely used interchangeably.
Within the costing, the following charges pairs of terms can be distinguished:
- Step-fixed and fixed costs, variable costs, and mixed costs
- Direct costs and overheads
- Primary costs and secondary costs
- Basic costs, other costs and fees
- Pagatorische costs and imputed costs
- Decision -relevant costs and decision costs Irrelevant
- Full cost and part cost
- Plan costs, normal costs and actual costs
- Total costs and unit costs
- Operating costs and maintenance costs for machinery and equipment
- Costs of depreciation
- Imputed costs
- Opportunity costs ( special type imputed costs )
- Target costs and actual costs
- According to the new institutional economics: transaction costs in carrying out day in day out transactions in the implementation of one-off transactions, these ex ante (cost of supply) and ex post (cost for follow-up ) can
- Contiguous with costs: contribution margin to cover overhead costs
- Time cost and time cost of
- Explicit costs ( = absolute costs, actual expenditure)
In the economics
In the economics of the cost term in the microeconomics is discussed in connection with the production and cost theory as a parameter in different production functions. Costs typically refers to the assessed market prices of factors of production used in the production of goods and services. The total cost (K) in the cost function divided into fixed ( Kfix ) and variable costs ( Kvar ): K = Kfix Kvar. Based on a single production unit shall apply mutatis mutandis, that make up the unit cost or average total cost (k ) of average fixed cost ( kfix ) and average variable cost ( kvar ): k = kfix kvar.
Fixed costs are, if the period of observation is chosen so short that the corresponding factor input does not vary with volume of production. With a sufficiently long-term selected observation period, all costs are variable, since a cessation of production will bring the long-term costs to zero. Not always the assignment is clearly possible. This is called quasi- fixed costs ( eg labor input with the same variable and fixed cost shares: wage costs, canteens, sanitary facilities, etc.).
Of fundamental importance in the microeconomics above the marginal cost (ie, the data related to an additional unit costs).
Economics in Accounting
The National Accounting uses the term social costs as a special case of external effects. These are external side effects of products and consumption. This is always the case when not all costs are borne by producers or consumers, but as a whole passed to third parties or society. This is the case for example in the environmental impact of transport.