The cost of a good or service is the expense incurred by a business or entrepreneur to produce or purchase the good or service.

Costing is the calculation of unit costs of a product by type of cost.

Examples of cost items for a costing of a good or service are:

• raw materials and supplies;
• purchased semi-finished products and components;
• Wages of production personnel;
• Accrual of payroll (unified social payment);
• depreciation of fixed assets;
• other production costs.

The costing can be calculated by other cost classification.

Production cost and total cost

The cost of production is divided into two groups: production cost and full cost.

• Production cost includes only production costs (fixed and variable): raw materials, materials, components, rent of production premises, wages and salaries of production personnel.
• Full cost includes all costs of the enterprise, both production and period costs (administrative, sales costs, other operating expenses): telephone services, wages of administrative and sales personnel, rent of administrative premises, etc.