Based on these data, the total selling and administrative expenses each year are the cost base is the absorption costing unit product cost rather than variable costing.
What are expenses ?
- Common expenses are the cost of goods sold, rental costs, labor costs, and utility costs.
- Although cost and expense are similar concepts and are sometimes used interchangeably, there are some differences that businesses need to consider.
- Costs usually refer to the price paid to acquire an asset, whereas expenses are ongoing expenses.
- For example, employee salaries and retail space rents.
- A cost is defined as an outflow of money or property to another person or entity in payment for an item or service.
- Expenses are costs incurred by a company and paid to suppliers or paid for products or services from other sources.
- Living expenses are expenses necessary to maintain daily life and health.
- They cover major categories of housing, food, clothing, healthcare and transportation. Understanding what is involved in each of these areas will help you budget.
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