Cost Total
Definition
The Cost Total KPI refers to the total amount of money spent in a set period in order to generate value.
Characteristics
| Include | Don’t include |
|
|
Calculation
| + marketing costs |
| + labour costs |
| + … |
| = Cost Total |
| Alias | Costs/Expenses/Spendings |
| Abbreviation | – |
| Unit | Currency (Euro/Dollar/YEN/…) |
Example
A company sells furniture online. It has labour costs of 5.000 € and pays 1.000 € rent for the office and has marketing costs of 7.000 €.
| + 5.000 € |
| + 1.000 € |
| + 7.000 € |
| = 13.000 € |
Q&A
Q: What if costs incur in January but I pay later on?
A: The time of payment is irrelevant in accrual accounting. All of January’s costs are included in January.
A: The time of payment is irrelevant in accrual accounting. All of January’s costs are included in January.
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