How much does it cost us to obtain a specific product? How much of the costs stay out of sight? It usually is like an iceberg; a lot of the costs are hidden. We provide a helpful tool to systematically list all components to acquire a specific product or service. The concept of Total Cost of Ownership (TCO) helps to estimate this. Its purpose is to help consumers and enterprise managers determine direct and indirect costs of a product or system (Wikipedia). It is a management accounting concept that can be used in full cost accounting or even ecological economics where it includes social costs.
By definition it is a calculation designed to help people make more informed financial decisions (about.com). Rather than just looking at the purchase price of an object, TCO looks at the complete cost from purchase to disposal. It adds to the initial purchase price other costs expected to be incurred during the life of the product, such as service, repair, and insurance. In an effort to list these costs we came up with a list of cost components that provide some insight in the total costs of ownership. Perhaps it proves helpful to you. Check our website in a few weeks to download the excel version of this list to help you calculate the TCO quickly.
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