1. Variable costs
1.1. As opposite to fixed costs, these expenses do vary depending on the goods and services produced on the business performance. The more produced, the greater the expenses are.
1.1.1. Ex. Shipping and packaging costs for a firm that sells online.
1.1.2. Ex. a piece rate labor wage. If workers are paid for unit produced, it counts as variable costs.
2. Fixed costs
2.1. Expenses that don't vary with the number of goods and services produced on the short term.
2.1.1. Ex. Machinery owned by a firm, used to produce goods.
2.1.2. Ex. Property owned by a firm, where a factory is located in.
3. Costs are the expenses of firms, divided and classified by their characteristics.
4. Operating costs
4.1. They are the expenses related to the operation of a firm in a daily basis.
4.1.1. Ex. Rent and utilities of a firm.
4.1.2. Ex. business travels and logistics.
5. Direct costs
5.1. Costs related to the production of goods and services. They include raw material, expenses and distribution costs and labor associated with production.
5.1.1. Ex. Wages for workers in a factory.
5.1.2. Ex. Metal for the same factory, which produces cars.
6. Indirect costs
6.1. Expenses not directly related to the production of goods and services, hard to trace for departments, activities, or proyects.
6.1.1. Ex. Electricity in an office.
6.1.2. Ex. Food for workers and water dispensers in a construction.
7. Costs represent the monetary and tangible value of goods and services produced by firms.
8. Opportunity costs
8.1. It is the loss of potential gainings when one decision is made over another. It is the loss of the could have been.
8.1.1. Ex. If a firm decides to buy certain equipment rather than lease it, the oportunity cost would be the difference between the new productivity against the price and interest of the equipment.
8.1.2. Ex. If a firm decides to start operation in certain area rather than another, the oportunity cost would be the difference between the revenue obtained in both hypotetical scenarios.