Question:
What is the difference between cost, value and price?
zapak
2007-06-16 00:12:46 UTC
What is the difference between cost, value and price?
Five answers:
Dimos Argento
2007-06-16 00:48:25 UTC
In simple and layman terms, they are the same in meaning in some usage during conversation. But in professional reports, writeups and discussion, their usage in sentences should be distinguished.



In finance and business, cost is usually used to connote historical cost or the money used to acquire something (eg original amount paid for goods, services and assets). An example of its use " It cost us USD700 to get his services" or " The goods we are selling right now has a cost of USD100 but we we sell it USD350".



Value as used in business connotes the amount of money that say, an asset has for a certain time period whether at present or any other time. It is necessarily the amount of money paid for to acquire something since it can be an amount arrived at which is the result of estimates and assumptions. Value can also be the sum of original cost +/- estimates and assumptions. Hence, the term " Present Market Value" is an amount arrived at using present market factors such as demand, the avilability and going rate of the same item in the market etc.. Another example is 'Net Book Value" or " Depreciated Book Vlaue" which is usually the difference between the Original Cost less the calculated depreciation. We do not use "Net Market Cost" or "Net Book Cost" since it will confuse people.



Price, like Cost, is usually used to denote the amount needed to pay something for purchase. The main difference in its use as against the use of Cost is the point of view of the writer or the speaker. It is better to ask a vendor " What is the price of your goods" instead of "What is the cost of your goods" since the vendor may give out his original cost (without markup) and the conversation is now misleading.



For a businessman, His price is his original cost + his profit markup while his cost is the original cost he paid to acquire ownership of the goods and resell it at his own price for a profit.



In discussions when someone asks " What price did you pay to get this goods?" , the answer can be limited to only the purchase price NOT including the freight and handling and other cost which form part of the total cost of the goods. If the question was " How was the cost of the goods?" The answer should be the overall sum of the monies paid for the goods (purchase cost +freight and handling etc..) Hope I made sense.
anonymous
2016-12-18 16:14:50 UTC
Price Cost Value
anonymous
2016-04-04 02:35:46 UTC
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Your question is not clear. Do you want to know the difference between cost price and value? Cost price is the price at which a person buys something. Although value signifies much the same, the term cost price is mostly used when a thing is purchased with the intention of being sold. Thus you usually have a selling price and consequently profit or loss following a cost price. However, value is not restricted to price only. It covers the intrinsic value, utility value and several other aspects as applicable.
anonymous
2016-03-19 07:31:46 UTC
COST - the actual amount of money and/or resources it takes from the beginning to the end of a product or service. This can include actual raw materials to human involvement. PRICE - the amount of money (usually) a seller believes their product or service is worth, and what they feel is a reasonable amount for the consumer to invest in said product or service (usually including profit which is above the cost). VALUE - the after cost and price, the meaning placed upon the consumption and/or usage of a product or service. Value depends on the longevity, durability and most of all, as mentioned, meaning placed upon a consumer good or service.
noname273
2007-06-16 03:12:40 UTC
cost is the actual money paid to acquire or manufacture a product, value is the notional or hypothetical price assigned to the product which may vary from person to person, place to place & product to product....& price is the value assigned by market forces while selling & purchasing a product.


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