ADMINISTRATIVE COST Meaning and
Definition
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Administrative cost refers to the expenses incurred by an organization or business entity in order to manage and support its day-to-day operations and functions. These costs are specifically associated with administrative activities and are not directly related to the production or provision of goods or services.
Administrative costs typically include various expenses such as salaries and wages of administrative personnel, office maintenance and supplies, rent, utilities, communication expenses, legal fees, accounting and bookkeeping, IT infrastructure, and other overhead expenses. These costs are essential for the smooth functioning of an organization and ensuring that its operations are properly managed.
Administrative costs are crucial for the overall management and coordination of various departments within an organization. They encompass activities like budgeting, planning, human resource management, procurement, compliance with regulations, record-keeping, and general administrative support. The purpose of these costs is to provide effective support for the core functions of the organization and facilitate its overall success and efficiency.
Measuring and controlling administrative costs is an important aspect of financial management for organizations, as excessive administrative costs can negatively impact the profitability and competitiveness of a business. Therefore, organizations constantly strive to optimize their administrative costs, by streamlining processes, utilizing technology, and implementing efficient management practices, while still ensuring effective support for operations and compliance with legal and regulatory requirements.
Common Misspellings for ADMINISTRATIVE COST
- administrative cody
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Etymology of ADMINISTRATIVE COST
The word "administrative" is derived from the Latin word "administrare", meaning "to manage or direct". It is composed of the prefix "ad-" (meaning "to" or "toward") and "ministrare" (meaning "to serve" or "to manage").
The word "cost" has its roots in Old French and Latin. In Old French, it was "coste", which meant "expense or outlay". It further traces back to the Latin word "constare", meaning "to stand together" or "to be settled".
When combined, "administrative cost" refers to the expenses and expenses incurred in the process of managing or directing various administrative tasks within an organization or system.
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