COST REDUCTION Definition

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COST REDUCTION is actions taken in the present designed to decrease costs in the present. See COST AVOIDANCE.

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GROSS PROFIT MARGIN ANALYSIS indicates what the companys pricing policy is and what the true mark-up margins are. Calculated by: Revenue - Cost of Goods Sold / Revenue. See GROSS PROFIT MARGIN ON SALES for more in-depth definition.

CONTRACT COSTING is mainly associated with civil engineering works, although sometimes also with the manufacture of a major engineering structure over a considerable time (for example, a contract to manufacture a turbine generator).

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