Posted in Finance, Accounting and Economics Terms, Total Reads: 56
Definition: General Cost
General cost are those cost which are incurred on day to day activities for producing a good and are independent of the cost incurred on the production of good. These cost generally include utility cost, electricity cost, water cost etc. They are generally covered in administrative cost and are shown as fixed cost in the cost accounting system in the income statement. This is generally clubbed under the operating cost in the Income section.
These general cost incurred on producing the good are of great significance in the world of marketing as they decide the pricing of the particular good. These cost are also used to arrive at the final price in the case of cost based pricing.
The above statement highlights the various costs in the income statement.