Money Cost and Real Cost

Money Cost of production is the actual monetary expenditure made by company in the production process. Money cost thus includes all the business expenses which involve outlay of money to support business operations.

For example the monetary expenditure on purchase of raw material, payment of wages and salaries, payment of rent and other charges of business etc can be termed as Money Cost.

Real Cost of production or business operation on the other hand includes all such expenses/costs of business which may or may not involve actual monetary expenditure.

For example if owner of a business venture uses his personal land and building for running the business venture and he/she does not charge any rent for the same then such head will not be considered/included while computing the Money Cost but this head will be part of Real Cost computation.

Powered By 360Presence

Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off Project Time Cost Trade-off

By Hassham

Leave a Reply

Your email address will not be published. Required fields are marked *