Kostot

Kostot, the Finnish term for costs, refer to resources sacrificed or consumed in the production of goods and services. In economics and accounting, kostot are valued in monetary terms and often include both economic and non-monetary elements. They are central to budgeting, pricing, and profitability analysis.

Costs are commonly categorized by how they behave or how they relate to a cost object. Fixed costs do not vary with the level of production within a relevant range, such as rent, depreciation, or salaried staff. Variable costs change with output, including raw materials, direct labor, and shipping. Direct costs can be traced to a specific cost object, like a particular product or project, while indirect costs (overheads) cannot be traced directly and must be allocated through a costing method.

Other important distinctions include sunk costs, which are past expenditures that cannot be recovered and should not guide current decisions, and opportunity costs, which represent the foregone benefits of choosing one option over another. Marginal cost refers to the cost of producing one additional unit, and step costs remain fixed within a range and then jump when a threshold is crossed.

Measurement and use of kostot occur within cost accounting and managerial accounting. Methods such as activity-based costing, absorption costing, and variable costing help managers analyze performance, set prices, plan budgets, and decide on make-or-buy or product mix strategies. In Finnish practice, kostot are tracked to assess profitability, optimize resource use, and support financial reporting. See also cost accounting, break-even analysis, and cost allocation.