Homework - Cost Definitions

Fixed Cost :- fixed charge: a periodic charge that does not vary with business volume (as insurance or rent or mortgage payments etc.)

Indirect Cost:- costs that are not directly accountable to a particular function or product; these are fixed costs. Indirect costs include taxes, administration, personnel and security costs, and are also known as overhead

Overhead Cost:- refers to an ongoing expense of operating a business. The term overhead is usually used to group expenses that are necessary to the continued functioning of the business but that do not directly generate profits.

Variable Cost:- A cost that varies in proportion to the quantity produced. Theoretically, variable costs are zero if there is no production. As opposed to fixed cost.