Common Cost Definition:

A common cost is a cost that is common to a number of costing objects but cannot be traced to them individually.

For example, the wage cost of the pilot of a 747 airliner is a common cost of all of the passengers on the aircraft. Without the pilot, there would be no flight and no passengers. But no part of the pilot’s wage is caused by any one passenger taking the flight.

Other Related Accounting Articles:

• What are Wage Expenses?
• Direct Materials Definition
• Cost Driver Definition
• Full Costing Definition
• Absorption Costing Definition
• Definition and Explanation of Activity Based Costing System
• Tangible Common Equity
• Direct Cost Definition
• Indirect Cost Definition
• Multiple Regression Definition