Applied Cost

AAA

DEFINITION of 'Applied Cost'

A term used in cost accounting to denote the cost assigned to something, which may be different from the actual cost. Cost accounting, which compares costs of production to output produced, is often part of a company's decision-making for many processes including budgeting and implementing cost controls.

INVESTOPEDIA EXPLAINS 'Applied Cost'

In manufacturing, for example, the applied cost of a car would include overhead costs such as capital equipment depreciation for the machinery used to make the car. Applied cost analysis could be used to improve manufacturing productivity and/or reduce per-unit costs.

RELATED TERMS
  1. Overhead Rate

    In managerial accounting, a cost added on to the direct costs ...
  2. Accounting

    The systematic and comprehensive recording of financial transactions ...
  3. Financial Accounting

    The process of recording, summarizing and reporting the myriad ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the ...
  5. Overhead

    An accounting term that refers to all ongoing business expenses ...
  6. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
Related Articles
  1. An Introduction To Depreciation
    Active Trading

    An Introduction To Depreciation

  2. Analyze Cash Flow The Easy Way
    Fundamental Analysis

    Analyze Cash Flow The Easy Way

  3. What is the difference between amortization ...
    Investing

    What is the difference between amortization ...

  4. Are Your Children Destroying Your Retirement?
    Retirement

    Are Your Children Destroying Your Retirement?

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center