Revenue Definition In Cost Accounting

Cost of revenue example.

Revenue definition in cost accounting. The cost of revenue is the total cost incurred to obtain a sale and the cost of the goods or services sold. Sells electronics products and offers services to repair electronic equipment. Cost of goods sold cogs although both costs of revenue and cogs are used interchangeably there are minute variances. Hence revenue is the amount.

The amount a business earns by selling goods or providing services is called revenue. A company s revenue which is reported on the first line of its income statement is often described as sales or service revenues. Cost of revenue vs. Revenue also called a sale is an increase in equity related to the sale of a product or service that earned income.

Also relevant means that a cost or revenue will change depending on a decision you make. What does income mean. Definition of revenue revenue is the amount a company receives from selling goods and or providing services to its customers and clients. A calculation used in activity based costing for determining the costs associated with activities based on particular time based processes.

Past costs are water under the bridge and if the costs or revenue remain the same no matter what you decide they aren t relevant. Reported total revenue of 100 million cogs of 15 million and. The remuneration of goods sold or services provided is called revenue. What is the definition of income.

Manufacturers are more prone to use the cost of goods sold whereas service providers are more prone to considering the cost of revenue. Income is the revenue a business earns from selling its goods and services or the money an individual receives in compensation for his or her labor services or investments. In cost accounting relevant means that you consider future revenue and expenses. There are many different types of revenues including product sales consulting fees and other services rent and even commission based fees.

Number of units sold x unit price revenue. Thus the cost of revenue is more than the traditional cost of goods sold concept since it includes those specific selling and marketing activities associated with a sale. In other words revenue is income earned by the company from its business activities. It is typically calculated as follows.

Revenue is an increase in assets or decrease in liabilities caused by the provision of services or products to customers. The primary difference between them is that the cost of goods sold does not consider any marketing and distribution costs.