Business Guidance and Knowledge for the Small Business Entrepreneur
Cost codes are one of the two sub groups of item codes. Cost codes are unique identifiers for inventory items for for groups of items either as assemblies or as a function of a process.
Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item. It is used in both financial and cost accounting.
Item codes are broken out into two distinct types: Sales (Revenue) and Cost Codes. The primary purpose is group values and units together in an account for evaluation purposes.
