Fixed costs cost of production paid, regardless of production levels. Fixed costs can change, but this is independent of output levels.
E.g., rent, bank loans, lighting, market research, salaries.
(Total) Variable costs the costs of production, that change in proportion with the level of output or sales.
E.g., raw materials, labour cost per item.
Total variable cost = Average variable cost × Quantity
Total costs the sum of the fixed costs and the total variable costs to produce a product.
Total cost = Fixed costs + Variable costs
Semi-variable costs contain elements of fixed and variable costs. They tend to change only when production or sales exceed a certain level of output.
E.g., Wi-fi up to 20 GB, when you exceed 20, there is extra charge.
Direct costs costs specifically related to a certain project or output of a product, without which the costs wouldn’t exist.
E.g., raw materials.
Indirect costs (overheads) costs that can’t be clearly linked production or sale of a single product.
E.g., lighting, admin staff salaries, stationary.
