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MRP glossary TOP > Cost Control > Internal Cost

Internal Cost

An item cost can be classified into its internal cost and external cost. The internal cost refers to the cost required by manufacturing or purchasing an item and it includes material cost, labor cost, expenses, subcontract processing cost, and overhead cost. As shown in the figure, by controlling each item with its internal cost, the influence caused by cost change can be easily grasped.

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Related term: Internal Cost and External Cost

Reference:JIT Business Research Mr. Hirano Hiroyuki

Indirect Material Cost | Cost Control | Internal Cost and External Cost