Fully loaded costs
Costs including relevant allocated overhead under a stated scope and allocation method. Distinguish total company costs from product-level unit costs and allocated costs from costs that change with a decision.
Fully loaded costs in round numbers
Hypothetical annual company amounts in US$ millions: revenue of 100.00 less cost of goods sold (COGS) of 69.50 gives gross profit of 30.50; subtract selling, general and administrative expense (SG&A) of 24.69 to get operating income of 5.81. The illustrated company-cost scope totals 94.19. COGS may already include production overhead; these totals are not the cost of one widget or every economic and capital cost. Unit costing requires a defensible allocation and production denominator.
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| Measure | Amount |
|---|---|
| Revenue | 100.00 |
| COGS | 69.50 |
| Gross profit | 100.00 − 69.50 = 30.50 |
| SG&A | 24.69 |
| Operating income | 30.50 − 24.69 = 5.81 |
| Illustrated company-cost total | 69.50 + 24.69 = 94.19 |