Distinguish between the different types of costs.

Differentiate between the various types of costs you have looked at

Fixed costs refer to costs that are not affected by sales volume or production and remain constant over a period. This includes rent, insurance, loan interest, and depreciation.

Variable cost are costs that vary based on production volume and product quality. You can think of raw materials, labor costs (which vary depending on how many people are working), as well as shipping fees.

Semi-variable or semi-fixed cost, also called semi-fixed costs, have fixed and variable parts. You may find utilities like electricity with a fixed monthly charge plus an additional charge for use above a specific threshold. Call centers such as customer service that requires staffing, but incur incremental communications expenses when calls rise beyond their normal level.

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