COSTS

In business, costs refer to the expenses incurred to produce goods or services. This includes all outlays like materials, labor, manufacturing, and overhead expenses such as rent, utilities, or equipment. Understanding costs helps businesses determine how much it costs to make a product or provide a service, which in turn influences pricing and profit. Managing costs effectively is essential for financial health, as it allows a business to stay competitive, ensure profitability, and plan for growth. Costs can be fixed (unchanging regardless of output) or variable (changing with production levels).