Cost of Production

Cost of production refers to the total expenses a business incurs to manufacture a product or provide a service. It includes all input costs such as raw materials, labor, equipment, and overhead like rent and utilities. Essentially, it represents the amount of money needed to produce a good or service before selling it. Understanding these costs helps a business determine pricing, ensure profitability, and manage resources effectively. It’s a key concept that reflects the financial effort required to bring a product from conception to market.