What is cost in a business firm? Is it the same as the price you put on the products you sell? The answer to that is a resounding NO as you will discover when you read this article. In it, I discuss the difference between cost and price. I also discuss the cost of a product, breaking it down into direct and indirect costs.
Not all costs in a business firm refer to product costs. Some costs are period costs -- those relating to the whole business firm. Then, there are prime and conversion costs. Read this article as an introductory article to the discipline of cost accounting - something every business person needs to understand!