Business glossary
Material cost
The cost of physical inputs consumed or installed while completing work.
Example
A job uses 20 panels costing an assumed $15 each, plus $40 attributable delivery. That produces $340 material cost before any other applicable costs or adjustments.
How it differs from related terms
Material cost is the business's cost of inputs. The amount charged to a customer may also reflect markup, handling or an agreed package price. Record quantity and unit cost separately to understand price changes and waste.
Frequently asked questions
What is an example of material cost?
A job uses 20 panels costing an assumed $15 each, plus $40 attributable delivery. That produces $340 material cost before any other applicable costs or adjustments.
How should material cost be interpreted?
Material cost is the business's cost of inputs. The amount charged to a customer may also reflect markup, handling or an agreed package price. Record quantity and unit cost separately to understand price changes and waste.