Costs are incurred to produce future benefits. In a profit-making firm, future benefits usually mean revenues. As costs are used up in the production of revenues,they are said to expire. Expired costs are called expenses. In each period, expenses are deducted from revenues in the income statement to determine the period's profit. For a company to remain in business, revenues must consistently exceed expenses; moreover, the income earned must be large enough to satisfy the owners of the firm. Thus, cost and price are related in the sense that price must exceed cost so that sufficient income is earned. Furthermore, lowering prices increases customer value by lowering customer sacrifice, and the ability to lower prices is connected to the ability to lower costs. Hence, managers need to know cost and trends in cost. Usually, however, knowing cost really means knowing what something or some object costs.