imputed cost

[mohsina]

Imputed costs are not actually incurred in some transactions but which are relevant to the decision as they part into a particular situation.This cost doesn’t enter into traditional accounting system but they are being related with economic reality, help in making better decision.

For example,  The owner of a house ha not to pay rent but it should take into consideration in making decision, otherwise cost will be understated.

[ummekulsum]

So, it means whenever it is relevant then calculate otherwise not .

[mohsina]

yes imputed cost is a relevant cost and considered for decision making purpose.

[munna99185]

Imputed costs consist of the opportunity costs of time and capital that the manager has invested in producing the given quantity of production and the opportunity costs of making a particular choice among the alternatives being considered.

Source: Barron's Accounting Dictionary


Sayed Farrukh Ahmed
Assistant Professor
Faculty of Business & Economics
Daffodil International University