Tangible Cost

AAA

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.

INVESTOPEDIA EXPLAINS '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. Goodwill

    An account that can be found in the assets portion of a company's ...
  2. Betterment

    A type of action or cost expenditure that contributes towards ...
  3. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  4. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  5. Hard Asset

    A tangible and physical item or object of worth that is owned ...
  6. Identifiable Asset

    An asset of an acquired company that can be assigned a fair value ...
Related Articles
  1. Economics Basics
    Economics

    Economics Basics

  2. Passing The Buck: The Hidden Costs Of ...
    Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of ...

  3. Is Your High-Profile Job Worth The Price?
    Professionals

    Is Your High-Profile Job Worth The Price?

  4. Can You Count On Goodwill?
    Personal Finance

    Can You Count On Goodwill?

comments powered by Disqus
Hot Definitions
  1. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  2. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  3. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  4. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  5. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  6. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
Trading Center