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5 Types of Cost

A cost is a financial sum that is paid out or lost. This is a basic dimension of accounting, economics and strategy. The following are common types of cost.

Accounting Costs

In financial accounting, a cost is an amount of money that is paid out. In some cases, costs must be accounted for as the value of an asset depreciates or amortizes. Accounting is aligned to tax law and securities law with regard to preparing the financial statements of a firm. The following are common types of cost used in financial accounting.

Strategic Costs

Costs that are used to form strategy and make decisions.

Operations Costs

Costs related to the core business processes of an organization. These are used to optimize and improve processes.

Marketing Costs

Costs that are specific to marketing and sales.

Economic Costs

Costs that are relevant to modeling the economic behavior of market participants.
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