Tangible Cost

DEFINITION of 'Tangible Cost'

A quantifiable cost related to an identifiable source or asset. Tangible costs represent expenses arising from such things as purchasing materials, paying employees or renting equipment.

BREAKING DOWN 'Tangible Cost'

Tangible costs are often associated with items that also have related intangible costs. An intangible cost consists of a subjective value placed on a circumstance or event in an attempt to quantify its impact.

For example, let's examine the costs associated with a customer who has received broken merchandise. The company will usually refund the value of the product to the customer, paying a tangible cost. If the customer is still upset over the event, he or she may complain about the poor service to friends. The potential loss of sales, resulting from the friends hearing the complaints, consists of an intangible cost relating to the broken merchandise.

RELATED TERMS
  1. Intangible Cost

    An unquantifiable cost relating to an identifiable source. Intangible ...
  2. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  3. Price to Tangible Book Value - ...

    A valuation ratio expressing the price of a security compared ...
  4. Tangible Book Value Per Share - ...

    A method of valuing a company on a per-share basis by measuring ...
  5. Tangible Common Equity Ratio - ...

    A ratio used to determine how much losses a bank can take before ...
  6. Cost Of Carry

    Costs incurred as a result of an investment position. These costs ...
Related Articles
  1. Term

    Comparing Tangible and Intangible Assets

    Tangible assets are physical assets such as land, vehicles or equipment.
  2. Economics

    Explaining Tangible Net Worth

    Tangible net worth is determined by taking total assets, then subtracting liabilities and intangible assets.
  3. Investing Basics

    Explaining Net Tangible Assets

    Net tangible assets is a company’s total assets subtracting both intangible assets (such as goodwill and intellectual property) and total liabilities.
  4. Entrepreneurship

    How to Calculate Your Tangible Net Worth

    Your net worth can be calculated with a simple equation.
  5. Economics

    What Are The Different Types Of Costs In Cost Accounting?

    Cost accounting measures several different types of costs associated with a company’s production processes.
  6. Economics

    What are Acquisition Costs?

    A company can recognize acquisition costs as those costs used to buy property and equipment.
  7. Economics

    Understanding Cost of Revenue

    The cost of revenue is the total costs a business incurs to manufacture and deliver a product or service.
  8. Fundamental Analysis

    Explaining Amortization In The Balance Sheet

    Amortization is important to account for intangible assets. Read to find out more about amortization.
  9. Investing Basics

    What's an Asset?

    An asset is a resource with economic value.
  10. Term

    What is Incremental Cost?

    Incremental cost is the added cost of manufacturing one more unit.
RELATED FAQS
  1. Why should you invest in tangible assets?

    Read about some of the possible benefits of investing in tangible assets, such as bullion, real estate, art, collectibles ... Read Answer >>
  2. Why is the amount of net tangible assets an important benchmark?

    Find out more about net tangible assets, how to calculate net tangible assets and the importance of net tangible assets and ... Read Answer >>
  3. How are net tangible assets calculated?

    Learn about net tangible assets, what it measures and how to calculate a company net tangible assets using examples. Read Answer >>
  4. What are the different types of tangible assets?

    Learn what tangible assets are, what other names they are called, what specific items are included and how they are handled ... Read Answer >>
  5. What are some examples of fixed assets?

    Learn the difference between fixed tangible assets and fixed intangible assets, and review examples of these two types of ... Read Answer >>
  6. What kinds of events or circumstances will increase or decrease the proportion of ...

    Learn the variety of events and circumstances which can significantly increase or decrease the proportion of intangible assets ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center