Costs

Businesses incur different types of costs, including fixed costs (costs that do not vary with production or sales volume, such as rent or salaries), variable costs (costs that change in proportion to production or sales volume, such as raw materials or direct labor), semi-variable costs (costs that have both fixed andvariable components, such as utilities or maintenance), direct costs (costs directly attributable to the production of specific goods or services, such as raw materials), indirect costs (costs that are not directly tied to specific goods or services but support overall operations, such as overhead expenses), and opportunity costs (the potential benefits or profits foregone by choosing one alternative over another).