Published in Operations and Supply Chain Terms by MBA Skool Team
What is Laid-Down Cost?
Laid-Down cost is the sum total of the cost of a product and its transportation expenses. The Laid-Down cost is used to compare the total cost of a product when it is shipped from different resources to a customer’s point of use. The invoice cost, customs, excise duties, freight and cartage are included in laid down cost. Laid down costs are on the asset side of the balance sheet and are included while determining the total cost of production of an item.
Laid down cost consist of following costs.
• Invoice cost: Invoice cost is the price that a company pay to its wholesale dealer to buy the item for resale. The invoice cost is used to determine the final retail price of a particular item.
• Customs cost are the costs to be paid to the government when a good is sent to you via courier or any other mean. It includes the VAT, Excise Duty etc.
• Fee that is charged to deliver the goods within a township is called cartage cost. It is also sometimes referred to as Haulage.
• Freight is the cost incurred by a company to send a good from the warehouse to the customer. It is an integral part of the laid down cost.
Hence, this concludes the definition of Laid-Down Cost along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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