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What is a Applied Cost?

 , updated on July 13, 2023
Applied cost is a cost that has been estimated or partially estimated. This term is associated with estimates of overhead that are added to the cost of products and services.

Use

It is common for costs such as overhead to be estimated for the purposes of decision making. For example, if you want to model the profitability of a new product you need to make approximations for overhead costs such as marketing and the administrative functions of an organization.
Business cases are typically constructed with applied costs. In many cases, applied costs are also used in financial accounting. In such cases, the difference between applied costs and actual costs may be calculated at a later point and treated as a cost variance.
Overview: Applied Cost
Type
Definition
An estimate of costs that is used when actual costs are unknown or partially unknown.
Value
Making decisions and modeling finances based on the best information available at a point in time.
Related Concepts
Next: Overhead

Business Costs

This is the complete list of articles we have written about business costs.
Abatement
Applied Cost
Business Equipment
Capacity Cost
Capex
Capital Improvement
Carrying Costs
Closing Costs
COGS
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Expenses
CAC
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Opex
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Shrinkage
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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