Imputed cost

Imputed cost is the cost incurred during the period when an asset is employed for a particular use, rather than redirecting the asset to a different use. This amount is the incremental difference between the two options. For example, a teacher decides to go back to school to earn a master's degree. During the period when she is at school, the imputed cost of this decision is the wages she would otherwise have earned if she had continued to work as a teacher.

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Cost Accounting Fundamentals