Editing Cost (section)

==Cost estimation==
{{Main|Cost estimation|Cost overrun|parametric estimating}}

When developing a [[business plan]] for a new or existing company, product or project, planners typically make cost estimates in order to assess whether [[revenue]]s/benefits will cover costs (see [[cost–benefit analysis]]). This is done in both business and government. Costs are often underestimated, resulting in [[cost overrun]] during execution.

''Cost-plus pricing'' is where the price equals cost plus a percentage of overhead or profit margin. In [[business economics]], the profitability of a trade or sales prospect relies on the ability of an enterprise to sustain [[Price#Market price|market prices]] that cover all costs and leave a [[Economic surplus#Producer surplus|surplus]] for owner interest, as expressed by: 

<math>\text{Profit = Revenues – Costs}</math>{{efn|[[Gross income|Gross profit]] is revenue minus the [[cost of goods sold]].<ref>{{cite web |title=Revenue vs. Profit: What's the Difference? |url=https://www.investopedia.com/ask/answers/122214/what-difference-between-revenue-and-profit.asp |publisher=Investopedia}}</ref>}}