Production Costs

Definition

Production costs refer to all expenses directly related to manufacturing or creating a product. In this case, they amount to $30,000.

Related terms

Fixed Costs: Fixed costs are expenses that remain constant regardless of the level of production or sales volume. Examples include rent for factory space and equipment depreciation.

Variable Costs: Variable costs change in direct proportion with changes in production or sales volume. Examples include raw material costs and labor wages.

Total Cost: Total cost is the sum of both fixed and variable costs involved in producing goods or services.