basic cost concepts

Basic cost concepts refer to the various expenses associated with producing goods or services. Key terms include: 1. **Fixed Costs**: Expenses that remain constant regardless of production levels, such as rent and salaries. 2. **Variable Costs**: Costs that fluctuate with production volume, like materials and labor. 3. **Total Cost**: The sum of fixed and variable costs at a given level of production. 4. **Opportunity Cost**: The potential benefit lost when choosing one option over another, highlighting the trade-offs in decision-making. Understanding these concepts helps individuals and businesses make informed financial decisions.