Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference
Add the QFINANCE search widget to your website

Home > QFINANCE Dictionary > Definition of material cost

Definition of

material cost

Operations & Production

price paid for product's raw materials the cost of the raw materials that go into a product. The material cost of a product excludes any indirect costs, for example, overhead or wages, associated with producing the item.

Recommended Further Reading (Term count)
  • Reducing Costs through Production and Supply Chain Management
    by Vinod Lall
    IKEA, the Swedish home products retailer, is known for its good-quality, inexpensive products, which are typically sold at prices 30–50% below those of its competitors. While the price of products from other companies continues to rise over time, IKEA claims that its retail prices have been reduced by a total of 20% over the last four years. At IKEA, the process of cost reduction starts at product conception and continues throughout the process...
  • A Total Balance Sheet Approach to Financial Risk
    by Terry Carroll
    We are living in some of the most volatile times in the history of the global financial markets. One of the reasons is exactly because they have become truly global. As banks seek to restore profitability, they may increase their offering of “treasury products” to customers. This article argues that these should be considered only in the context of a total balance sheet approach rather than transaction by transaction.
material cost - Related Articles
  • Construction and Building Materials

    Sector Profiles

    The industry also has a clear and very close relationship with related industries specializing in building materials, including cement, plastics, wood, steel, and glass, as well as innovative new product types, with particular strength, thermal, or low-maintenance properties.

  • The Missing Metrics: Managing the Cost of Complexity

    Best Practice

    Imagine a product: a coffee mug offered in one style, color, size, and type of packaging. It is sourced from one supplier, packaged and stocked in one location, and offered for sale to one customer. You can easily compute the “standard cost” of this mug in terms of material, labor, and overhead (an older way), or in terms of material plus cost of acquisition, plus fixed and variable conversion costs (a newer way
    By John L. Mariotti

More

Definitions of ’material cost’ and meaning of ’material cost’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’material cost’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top

Related Blog Posts

More related Blog results