Charge vs. Cost — What's the Difference?
By Fiza Rafique & Maham Liaqat — Updated on March 13, 2024
Charge refers to the price set by a provider for goods or services, often including overheads and profit margins, while cost represents the expenses involved in producing or acquiring goods or services.
Difference Between Charge and Cost
Table of Contents
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Key Differences
Charge is the amount of money that a business or service provider asks from a customer for a product or service. This figure typically includes the costs of production, a markup for profit, and sometimes additional fees or taxes. On the other hand, cost refers to the total expenses incurred in the creation or acquisition of goods and services, including materials, labor, and overheads, but without the profit margin added on for the final sale price.
While the charge is the price a customer pays, which can be influenced by market demand, competition, and value perception, the cost is influenced by factors like raw material prices, manufacturing efficiency, and economies of scale. Businesses aim to manage costs effectively to maintain or increase the margin between cost and charge.
In setting charges, businesses must consider not only the direct costs but also indirect costs such as administration, marketing, and distribution. Meanwhile, costs are analyzed to identify areas for savings, efficiency improvements, or investment to reduce production expenses and increase profitability.
Charges can vary widely depending on the industry, market conditions, and business strategy, often including a significant markup over cost to cover expenses and provide profit. Costs, conversely, are a more internal figure, focused on the financial outlay required to produce goods or services, aimed at minimizing to maximize profit.
The relationship between charge and cost is crucial for pricing strategy. A business must understand its cost structure to set charges that cover costs and achieve desired profit levels. Conversely, understanding the charge helps in aligning cost management strategies with market realities.
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Comparison Chart
Definition
The price asked by a provider for goods or services.
The expenses incurred in producing or acquiring goods or services.
Influenced By
Market demand, competition, value perception.
Raw material prices, labor, manufacturing efficiency.
Purpose
To cover costs, expenses, and provide profit.
To represent the financial outlay needed to produce goods or services.
Considerations
Includes profit margin, overhead, and sometimes taxes.
Focuses on direct and indirect production or acquisition expenses.
Perspective
External, what the customer sees and pays.
Internal, focused on business operations and efficiency.
Compare with Definitions
Charge
A financial demand made by a provider.
Additional charges were applied for expedited shipping.
Cost
The total expenses involved in making a product available.
The cost of goods sold increased last quarter.
Charge
The price set by a service provider.
The hotel charges a nightly rate plus taxes.
Cost
The expenditure on resources in the production process.
Labor costs are a significant part of manufacturing expenses.
Charge
A fee imposed for a service.
There's a late payment charge on overdue invoices.
Cost
An amount that must be spent or sacrificed to obtain something.
The cost of the new building was covered by donations.
Charge
The amount billed to a customer for products or services.
The charge for the repair services was higher than anticipated.
Cost
The price paid to acquire, produce, or maintain something.
They reduced the product's cost by sourcing cheaper materials.
Charge
The price of admission or access.
The museum has a $20 charge for adults.
Cost
An amount paid or required in payment for a purchase; a price.
Charge
Demand (an amount) as a price for a service rendered or goods supplied
He charged me five dollars for the wine
Wedding planners may charge an hourly fee of up to £150
Cost
Financial outlay required for operations.
Cutting operational costs has improved the company's profitability.
Charge
Formally accuse (someone) of something, especially an offence under law
They were charged with assault
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost.
Charge
Entrust (someone) with a task as a duty or responsibility
The committee was charged with reshaping the educational system
Cost
The expenditure of something, such as time or labor, necessary for the attainment of a goal
"Freedom to advocate unpopular causes does not require that such advocacy be without cost" (Milton Friedman).
Charge
Store electrical energy in (a battery or battery-operated device)
The shaver can be charged up and used while travelling
Cost
Costs(Law) Charges incurred in bringing litigation, including court fees and charges that may be payable by the losing party, but usually not including attorneys' fees.
Charge
Rush forward in attack
The plan is to charge headlong at the enemy
Cost
To require a specified payment, expenditure, effort, or loss
It costs more to live in the city.
Charge
Place a heraldic bearing on
A pennant argent, charged with a cross gules
Cost
To have as a price.
Charge
A price asked for goods or services
Our standard charge for a letter is £25
Cost
To cause to lose, suffer, or sacrifice
Participating in the strike cost me my job.
Charge
An accusation, typically one formally made against a prisoner brought to trial
He appeared in court on a charge of attempted murder
Cost
Past tense and past participle costed To estimate or determine the cost of
The accountants costed out our expenses.
Charge
Responsibility for the care or control of someone or something
The people in her charge are pupils and not experimental subjects
Cost
To incur a charge of; to require payment of a (specified) price.
This shirt cost $50, while this was cheaper at only $30.
It will cost you a lot of money to take a trip around the world.
Charge
The property of matter that is responsible for electrical phenomena, existing in a positive or negative form.
Cost
To cause something to be lost; to cause the expenditure or relinquishment of.
Trying to rescue the man from the burning building cost them their lives.
Charge
A quantity of explosive to be detonated in order to fire a gun or similar weapon
Smaller charges, fired on three minute fuses lit by hand
Cost
To require to be borne or suffered; to cause.
Charge
A headlong rush forward, typically in attack
A cavalry charge
Cost
To calculate or estimate a price.
I'd cost the repair work at a few thousand.
Charge
A device or bearing placed on a shield or crest.
Cost
Amount of money, time, etc. that is required or used.
The total cost of the new complex was an estimated $1.5 million.
We have to cut costs if we want to avoid bankruptcy.
The average cost of a new house is twice as much as it was 20 years ago.
Charge
To impose a duty, responsibility, or obligation on
Charged him with the task of watching the young swimmers.
Cost
A negative consequence or loss that occurs or is required to occur.
Spending all your time working may earn you a lot of money at the cost of your health.
The army won the battle decisively, but at a cost of many lives.
Charge
To instruct or urge authoritatively; command
Charged her not to reveal the source of information.
Cost
(obsolete) Manner; way; means; available course; contrivance.en
Charge
(Law) To instruct (a jury) about the law, its application, and the weighing of evidence.
Cost
Quality; condition; property; value; worth; a wont or habit; disposition; nature; kind; characteristic.
Charge
To set or ask (a given amount) as a price
Charges ten dollars for a haircut.
Cost
(obsolete) A rib; a side.
Charge
To hold financially liable; demand payment from
Charged her for the balance due.
Cost
(heraldry) A cottise.
Charge
To purchase on credit
Paid cash for the stockings but charged the new coat.
Cost
A rib; a side; a region or coast.
Betwixt the costs of a ship.
Charge
To load to capacity; fill
Charge a furnace with coal.
Cost
See Cottise.
Charge
To load (a gun or other firearm) with a quantity of explosive
Charged the musket with powder.
Cost
The amount paid, charged, or engaged to be paid, for anything bought or taken in barter; charge; expense; hence, whatever, as labor, self-denial, suffering, etc., is requisite to secure benefit.
One day shall crown the alliance on 't so please you,Here at my house, and at my proper cost.
At less cost of life than is often expended in a skirmish, [Charles V.] saved Europe from invasion.
Charge
To pervade or fill, as with a feeling or quality
The atmosphere was charged with tension.
Cost
Loss of any kind; detriment; pain; suffering.
I know thy trains,Though dearly to my cost, thy gins and toils.
Charge
To make a claim of wrongdoing against; accuse or blame
The prosecutors charged him with car theft. Critics charged the writer with a lack of originality.
Cost
Expenses incurred in litigation.
Charge
To put the blame for; attribute or impute
Charged the accident to the driver's inexperience.
Cost
To require to be given, expended, or laid out therefor, as in barter, purchase, acquisition, etc.; to cause the cost, expenditure, relinquishment, or loss of; as, the ticket cost a dollar; the effort cost his life.
A diamond gone, cost me two thousand ducats.
Though it cost me ten nights' watchings.
Charge
To rush against in an attack
The troops charged the enemy line.
Cost
To require to be borne or suffered; to cause.
To do him wanton rites, which cost them woe.
Charge
(Basketball) To bump or run into (a defender) illegally while in possession of the ball or having just made a pass or shot.
Cost
The total spent for goods or services including money and time and labor
Charge
(Sports) To bump (an opponent) so as to knock off balance or gain control of the ball, as in soccer.
Cost
The property of having material worth (often indicated by the amount of money something would bring if sold);
The fluctuating monetary value of gold and silver
He puts a high price on his services
He couldn't calculate the cost of the collection
Charge
(Sports) To body-check (an opponent) illegally, from behind or after taking more than two strides, especially in ice hockey.
Cost
Value measured by what must be given or done or undergone to obtain something;
The cost in human life was enormous
The price of success is hard work
What price glory?
Charge
To cause formation of a net electric charge on or in (a conductor, for example).
Cost
Be priced at;
These shoes cost $100
Charge
To energize (a storage battery) by passing current through it in the direction opposite to discharge.
Cost
Require to lose, suffer, or sacrifice;
This mistake cost him his job
Charge
To excite; rouse
A speaker who knows how to charge up a crowd.
Charge
To direct or put (a weapon) into position for use; level or direct.
Charge
(Heraldry) To place a charge on (an escutcheon).
Charge
To rush forward in an attack
The dog charged at the intruder.
Charge
To rush forward; run
Children charging around the house.
Charge
To demand or ask payment
Did not charge for the second cup of coffee.
Charge
To make a purchase or purchases on credit.
Charge
(Accounting) To consider or record as a loss. Often used with off.
Charge
To become energized
The battery is still charging.
Charge
Expense; cost
Added to the bill a charge for replacing the thermostat.
Charge
The price asked for something
What's the charge for a new tire?.
Charge
A debt or an entry in an account recording a debt
Are you paying cash or is this a charge?.
Charge
A financial burden, such as a tax or lien.
Charge
A weight or burden; a load
A freighter relieved of its charge of cargo.
Charge
The quantity that a container or apparatus can hold.
Charge
A quantity of explosive to be set off at one time.
Charge
An assigned duty or task; a responsibility
The commission's charge was to determine the facts.
Charge
Care; custody
A child put in my charge.
Charge
Supervision; management
The scientist who had overall charge of the research project.
Charge
One that is entrusted to another's care or management
The baby sitter's three young charges.
Charge
An order, command, or injunction.
Charge
Instruction given by a judge to a jury about the law, its application, and the weighing of evidence.
Charge
A claim of wrongdoing; an accusation
A charge of murder.
Pleaded not guilty to the charges.
Charge
A rushing, forceful attack
Repelled the charge of enemy troops.
The charge of a herd of elephants.
Charge
The command to attack
The bugler sounded the charge.
Charge
The intrinsic property of matter responsible for all electric phenomena, in particular for the electromagnetic force, occurring in two forms arbitrarily designated negative and positive.
Charge
The net measure of this property possessed by a body or contained in a bounded region of space, measured in coulombs, ampere-hours, or units of elementary charge. Also called electric charge.
Charge
See magnetic charge.
Charge
See color charge.
Charge
(Informal) A feeling of pleasant excitement; a thrill
Got a real charge out of the movie.
Charge
(Heraldry) A figure or device represented on the field of an escutcheon.
Charge
The amount of money levied for a service.
There will be a charge of five dollars.
Charge
(military) A ground attack against a prepared enemy.
Charge
A forceful forward movement.
Charge
An accusation.
Charge
An official description (by the police or a court) of a crime that somebody may be guilty of.
Two charges of manslaughter
Charge
An accusation by a person or organization.
That's a slanderous charge of abuse of trust.
Charge
An electric charge.
Charge
The scope of someone's responsibility.
The child was in the nanny's charge.
Charge
Someone or something entrusted to one's care, such as a child to a babysitter or a student to a teacher.
The child was a charge of the nanny.
Charge
A load or burden; cargo.
The ship had a charge of colonists and their belongings.
Charge
An instruction.
I gave him the charge to get the deal closed by the end of the month.
Charge
(basketball) An offensive foul in which the player with the ball moves into a stationary defender.
Charge
(firearms) A measured amount of powder and/or shot in a cartridge.
Charge
(by extension) A measured amount of explosive.
Charge
(heraldry) An image displayed on an escutcheon.
Charge
(weaponry) A position (of a weapon) fitted for attack.
To bring a weapon to the charge
Charge
(farriery) A sort of plaster or ointment.
Charge
(obsolete) Weight; import; value.
Charge
A measure of thirty-six pigs of lead, each pig weighing about seventy pounds; a charre.
Charge
(ecclesiastical) An address given at a church service concluding a visitation.
Charge
To assign a duty or responsibility to.
Charge
(transitive) To assign (a debit) to an account.
Let's charge this to marketing.
Charge
(transitive) To pay on account, as by using a credit card.
Can I charge my purchase to my credit card?
Can I charge this purchase?
Charge
(ambitransitive) To require payment (of) (a price or fee, for goods, services, etc.).
To charge high for goods
I won't charge you for the wheat.
Charge
(dated) To sell at a given price.
To charge coal at $5 per unit
Charge
(law) To formally accuse (a person) of a crime.
I'm charging you with assault and battery.
Charge
To impute or ascribe.
Charge
To call to account; to challenge.
Charge
(transitive) To place a burden, load or responsibility on or in.
Charge
To ornament with or cause to bear.
To charge an architectural member with a moulding
Charge
(heraldry) To assume as a bearing.
He charges three roses.
Charge
(heraldry) To add to or represent on.
He charges his shield with three roses or.
Charge
(transitive) To load equipment with material required for its use, as a firearm with powder, a fire hose with water, a chemical reactor with raw materials.
Charge your weapons; we're moving up.
Charge
(transitive) To cause to take on an electric charge.
Rubbing amber with wool will charge it quickly.
Charge
(transitive) To replenish energy to (a battery, or a device containing a battery) by use of an electrical device plugged into a power outlet.
He charged the battery overnight.
Don't forget to charge the drill.
I charge my phone every night.
Charge
To replenish energy.
The battery is still charging: I can't use it yet.
His cell phone charges very quickly, whereas mine takes forever.
Charge
(intransitive) To move forward quickly and forcefully, particularly in combat and/or on horseback.
Charge
To attack by moving forward quickly in a group.
The impetuous corps charged the enemy lines.
Charge
(basketball) To commit a charging foul.
Charge
To take a few steps down the pitch towards the bowler as they deliver the ball, either to disrupt the length of the delivery, or to get into a better position to hit the ball.
Charge
To lie on the belly and be still. A command given by a hunter to a dog
Charge
To lay on or impose, as a load, tax, or burden; to load; to fill.
A carte that charged was with hay.
The charging of children's memories with rules.
Charge
To lay on or impose, as a task, duty, or trust; to command, instruct, or exhort with authority; to enjoin; to urge earnestly; as, to charge a jury; to charge the clergy of a diocese; to charge an agent.
Moses . . . charged you to love the Lord your God.
Cromwell, I charge thee, fling away ambition.
Charge
To lay on, impose, or make subject to or liable for.
When land shall be charged by any lien.
Charge
To fix or demand as a price; as, he charges two dollars a barrel for apples.
Charge
To place something to the account of as a debt; to debit, as, to charge one with goods. Also, to enter upon the debit side of an account; as, to charge a sum to one.
Charge
To impute or ascribe; to lay to one's charge.
No more accuse thy pen, but charge the crimeOn native sloth and negligence of time.
Charge
To accuse; to make a charge or assertion against (a person or thing); to lay the responsibility (for something said or done) at the door of.
If he did that wrong you charge him with.
Charge
To place within or upon any firearm, piece of apparatus or machinery, the quantity it is intended and fitted to hold or bear; to load; to fill; as, to charge a gun; to charge an electrical machine, etc.
Their battering cannon charged to the mouths.
Charge
To ornament with or cause to bear; as, to charge an architectural member with a molding.
Charge
To assume as a bearing; as, he charges three roses or; to add to or represent on; as, he charges his shield with three roses or.
Charge
To call to account; to challenge.
To charge me to an answer.
Charge
To bear down upon; to rush upon; to attack.
Charged our main battle's front.
Charge
To make an onset or rush; as, to charge with fixed bayonets.
Like your heroes of antiquity, he charges in iron.
"Charge for the guns!" he said.
Charge
To demand a price; as, to charge high for goods.
Charge
To debit on an account; as, to charge for purchases.
Charge
To squat on its belly and be still; - a command given by a sportsman to a dog.
Charge
A load or burder laid upon a person or thing.
Charge
A person or thing commited or intrusted to the care, custody, or management of another; a trust.
Charge
Custody or care of any person, thing, or place; office; responsibility; oversight; obigation; duty.
'Tis a great charge to come under one body's hand.
Charge
Heed; care; anxiety; trouble.
Charge
Harm.
Charge
An order; a mandate or command; an injunction.
The king gave cherge concerning Absalom.
Charge
An address (esp. an earnest or impressive address) containing instruction or exhortation; as, the charge of a judge to a jury; the charge of a bishop to his clergy.
Charge
An accusation of a wrong of offense; allegation; indictment; specification of something alleged.
The charge of confounding very different classes of phenomena.
Charge
Whatever constitutes a burden on property, as rents, taxes, lines, etc.; costs; expense incurred; - usually in the plural.
Charge
The price demanded for a thing or service.
Charge
An entry or a account of that which is due from one party to another; that which is debited in a business transaction; as, a charge in an account book.
Charge
That quantity, as of ammunition, electricity, ore, fuel, etc., which any apparatus, as a gun, battery, furnace, machine, etc., is intended to receive and fitted to hold, or which is actually in it at one time
Charge
The act of rushing upon, or towards, an enemy; a sudden onset or attack, as of troops, esp. cavalry; hence, the signal for attack; as, to sound the charge.
Never, in any other war afore, gave the Romans a hotter charge upon the enemies.
The charge of the light brigade.
Charge
A position (of a weapon) fitted for attack; as, to bring a weapon to the charge.
Charge
A sort of plaster or ointment.
Charge
Thirty-six pigs of lead, each pig weighing about seventy pounds; - called also charre.
Charge
Weight; import; value.
Many suchlike "as's" of great charge.
Charge
(criminal law) a pleading describing some wrong or offense;
He was arrested on a charge of larceny
Charge
The price charged for some article or service;
The admission charge
Charge
An assertion that someone is guilty of a fault or offence;
The newspaper published charges that Jones was guilty of drunken driving
Charge
Request for payment of a debt;
They submitted their charges at the end of each month
Charge
A impetuous rush toward someone or something;
The wrestler's charge carried him past his adversary
The battle began with a cavalry charge
Charge
The quantity of unbalanced electricity in a body (either positive or negative) and construed as an excess or deficiency of electrons;
The battery needed a fresh charge
Charge
Financial liabilities (such as a tax);
The charges against the estate
Charge
A person committed to your care;
The teacher led her charges across the street
Charge
Attention and management implying responsibility for safety;
He is in the care of a bodyguard
Charge
A special assignment that is given to a person or group;
A confidential mission to London
His charge was deliver a message
Charge
A formal statement of a command or injunction to do something;
The judge's charge to the jury
Charge
A quantity of explosive to be set off at one time;
This cartridge has a powder charge of 50 grains
Charge
The swift release of a store of affective force;
They got a great bang out of it
What a boot!
He got a quick rush from injecting heroin
He does it for kicks
Charge
(psychoanalysis) the libidinal energy invested in some idea or person or object;
Freud thought of cathexis as a psychic analog of an electrical charge
Charge
Heraldry consisting of a design or image depicted on a shield
Charge
To make a rush at or sudden attack upon, as in battle;
He saw Jess charging at him with a pitchfork
Charge
Blame for, make a claim of wrongdoing or misbehavior against;
He charged me director with indifference
Charge
Demand payment;
Will I get charged for this service?
We were billed for 4 nights in the hotel, although we stayed only 3 nights
Charge
Move quickly and violently;
The car tore down the street
He came charging into my office
Charge
Assign a duty, responsibility or obligation to;
He was appointed deputy manager
She was charged with supervising the creation of a concordance
Charge
File a formal charge against;
The suspect was charged with murdering his wife
Charge
Make an accusatory claim;
The defense attorney charged that the jurors were biased
Charge
Fill or load to capacity;
Charge the wagon with hay
Charge
Enter a certain amount as a charge;
He charged me $15
Charge
Cause to be admitted; of persons to an institution;
After the second episode, she had to be committed
He was committed to prison
Charge
Give over to another for care or safekeeping;
Consign your baggage
Charge
Pay with a credit card; pay with plastic money; postpone payment by recording a purchase as a debt;
Will you pay cash or charge the purchase?
Charge
Lie down on command, of hunting dogs
Charge
Cause to be agitated, excited, or roused;
The speaker charged up the crowd with his inflammatory remarks
Charge
Place a heraldic bearing on;
Charge all weapons, shields, and banners
Charge
Provide with munition;
He loaded his gun carefully
Charge
Direct into a position for use;
Point a gun
He charged his weapon at me
Charge
Impose a task upon, assign a responsibility to;
He charged her with cleaning up all the files over the weekend
Charge
Instruct (a jury) about the law, its application, and the weighing of evidence
Charge
Instruct or command with authority;
The teacher charged the children to memorize the poem
Charge
Attribute responsibility to;
We blamed the accident on her
The tragedy was charged to her inexperience
Charge
Set or ask for a certain price;
How much do you charge for lunch?
This fellow charges $100 for a massage
Charge
Cause formation of a net electrical charge in or on;
Charge a conductor
Charge
Energize a battery by passing a current through it in the direction opposite to discharge;
I need to charge my car battery
Charge
Saturate;
The room was charged with tension and anxiety
Common Curiosities
Why is understanding cost important for a business?
Understanding cost helps in pricing strategies, ensuring profitability, and identifying areas for efficiency improvements.
Does the charge always include a profit margin?
Yes, charges typically include a markup for profit, except in non-profit scenarios or certain promotional strategies.
Can charges vary for the same product or service?
Yes, charges can vary based on the provider, location, market conditions, and additional services or fees.
Can the cost be higher than the charge?
Typically, businesses set charges higher than costs to ensure profitability, but in some strategies or promotions, charges may be set lower.
What is the main difference between charge and cost?
Charge is what customers pay for goods or services, including profit, while cost is the expense incurred to produce or acquire those goods or services.
Can a business survive with charges equal to costs?
While it might cover operational expenses temporarily, a business needs to set charges above costs for long-term sustainability and growth.
How do businesses determine charges?
Businesses determine charges based on costs, market conditions, competition, and desired profit margins.
How do market conditions affect charges?
Market demand, competition, and consumer value perception can influence how much a business can charge for its goods or services.
Is there a standard markup for charges over costs?
No, markup can vary widely depending on the industry, product, market conditions, and business strategy.
Is cost just the price of materials?
No, cost includes all expenses related to production or acquisition, including materials, labor, and overheads.
How do indirect costs affect pricing?
Indirect costs such as administration, marketing, and distribution must be covered by the charge, affecting pricing decisions.
How do economic conditions affect costs and charges?
Economic conditions can affect material prices, labor costs, consumer spending habits, and overall market dynamics, impacting both costs and charges.
How can a business reduce its costs?
Businesses can reduce costs through efficiency improvements, negotiating better prices for materials, and optimizing operations.
What is a loss leader strategy?
A loss leader strategy involves setting the charge for a product lower than its cost to attract customers and drive sales of other profitable products.
What role does competition play in setting charges?
Competition can force businesses to adjust charges to attract customers while still covering costs and ensuring profitability.
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Written by
Fiza RafiqueFiza Rafique is a skilled content writer at AskDifference.com, where she meticulously refines and enhances written pieces. Drawing from her vast editorial expertise, Fiza ensures clarity, accuracy, and precision in every article. Passionate about language, she continually seeks to elevate the quality of content for readers worldwide.
Co-written by
Maham Liaqat
