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Acquisition of raw material is an investment. When used in the manufacturing of a product, raw material is considered as a production cost. The product obtained from the transformation of raw material is a new investment. During production, the raw material does not cease to be an asset. It is an investment in transformation. The acquisition of an industrial equipment represents an investment. In proportion to which the machine is used in production, it is proportionally converted into a cost, by depreciation. The product is a new investment which depends on depreciation in its production amount.
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The word Cost has a wide meaning: it can be used to represent to represent the Cost of Goods Sold (CMV) in a trading company, Cost of Services Rendered in a service company, Cost of Manufacturing a product, Direct Manufacturing Cost etc. |
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