1) Variable costs: Costs that are directly proportional the amount of work performed, which means they increase as well. This type of cost is often the raw materials that are used to produce goods.
2) Fixed costs: These are the types of costs that remain constant, regardless of fluctuations in levels of activity. Rent and salary for employees working at a set wage are examples.
This is the third step. Costs change in pre-determined steps due to increased demand and additional resources required. They remain constant up until the following stage. Examples here include overtime payments & advertising campaigns.
4 Semi-variable cost: This type includes both fixed and variables components.Telephone bills. This amount will vary depending on the usage and any fees that may be charged over time by your provider.
5) Mixed Costs: These involve more than one factor affecting them such as labour plus materials & equipment hence why they can’t be classified under any single category but rather require their own unique approach when considering related expenses.
In conclusion, understanding how different types of costs behave is essential when it comes to managing finances effectively as it provides insights into where funds should be allocated/redistributed depending on situation faced thus enabling organisations better control over budgeting decisions made over time.