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What Are Upstream Costs? What Upstream Costs Would Be Incurred

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Essay

What are upstream costs? What upstream costs would be incurred by a company that produces and sells computer software programs?


Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product.

Uncollectible

Debt or receivables that are considered impossible to collect, potentially due to the debtor's inability to pay.

Budgeted Cash Disbursements

Budgeted cash disbursements are forecasted cash payments during a specific period, part of cash flow planning.

Bad Debts

Accounts receivable that are considered uncollectible and are written off as a loss.

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