Cost is the cash or cash-equivalent value sacrificed for goods and services that is
expected to bring a current or future benefit to the organization. We say cash equivalent
because noncash resources can be exchanged for the desired goods or services.
For example, equipment may be traded for materials used in production. Cost can
be thought of as a dollar measure of the resources used to achieve a given benefit.
Minimizing the cost required to achieve the benefit means that a firm is becoming
more efficient. However, costs must be managed strategically. For example, managers
should have the objective of providing the same (or greater) customer value for a
lower cost than their competitors. In this way, the strategic position of the firm is
increased, and a competitive advantage created