Material cost is the cost of the raw materials and components used to create a product.

The materials must be easily identifiable with the resulting product (otherwise they are considered to be joint costs). Labor cost is wages that are incurred in order to produce specific goods or provide specific services to customers. Contingency has been defined as the amount of money or time needed above the estimate to reduce the risk of overruns of project objectives to a level acceptable to the organization Cost is usually a monetary valuation of (1) effort, (2) material, (3) resources, (4) time and utilities consumed, (5) risks incurred, and (6) opportunity forgone in production and delivery of a good or service. All expenses are costs, but not all costs (such as those incurred in acquisition of an income-generating asset) are expenses. Amount is a quantity of something, or the sum of multiple quantities expressed as a number that may or may not be expressed as a number. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Mark-up amount added to the cost price of an item to cover incidental costs (interest, labor, taxes, utilities) and to provide for profit in the item's selling price. Profit is the difference between the purchase and the component costs of delivered goods and/or services and any operating or other expense. It is reflected in reduction in liabilities, increase in assets, and/or increase in owners' equity. It furnishes resources for investing in future operations, and its absence may result in the extinction of a company. Expanded Value Added Tax (E-VAT) is a form of sales tax that is imposed on the sale of goods and services and on the import of goods into the Philippines. It is a consumption tax (those who consume more are taxed more) and an indirect tax, which can be passed on to the buyer. The current E-VAT rate is 12% of transactions. Direct cost is an expense that can be traced directly to (or identified with) a specific cost center or cost object such as a department, process, or product. Example of direct cost: such as for labor, material, fuel or power Indirect costs are costs used by multiple activities, and which cannot therefore be assigned to specific products, services, geographical regions, customers, or other cost objects. Instead, indirect costs are needed to operate the business as a whole. Consumbales are goods which (1) used up (not returned) after issuance from stores, (2) become incorporated into other goods and loose their identity, or (3) cannot be used for their intended purpose without extinguishing or transforming their substance. Estimate is an approximation, prediction or projection of a quantity based on experience and/or information available at the time, with the recognition that other pertinent facts are unclear or unknown. An estimate is almost the same as an educated guess, and the cheapest (and least accurate) type of modeling.