DEFINITION OF COST

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In a business, cost expresses the amount of money that is spent on the production or creation of a good or service. Cost does not include a markup for profit.

From a seller's point of view, the cost is the amount of money spent to produce a product or good. If sellers sold their goods at the same price as they cost to produce, then they would break even. This means that they would not lose money on their sales, but their company would not make a profit either.

Therefore, the cost of a product from the buyer's point of view can be called the price. This is the amount charged for a product by the seller, and it includes both the cost to make the product and the markup cost added by the seller to produce a profit.

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