The following elements are
included in the cost of production: (1) Purchase
of raw machinery, (2) Installation of plant and
machinery, (3) Wages of labor, (4) Rent of
Building, (e) Interest on capital, (f) Wear and
tear of the machinery and building, (g)
Advertisement expenses, (h) Insurance charges,
(i) Payment of taxes. (j) In the cost of
production, the imputed value of the factor of
production owned by the firm itself is also
added, (k) The normal profit of the entrepreneur
is also included In the cost of production.