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Cost analysis is the systematic study of the costs incurred by an organisation in producing goods or providing services. It helps managers understand how much is being spent, where the money is being spent, and how costs can be controlled or reduced. In management, cost analysis is an important tool for planning, decision-making, budgeting, pricing and improving organisational efficiency. Costs can be classified in different ways for the purpose of analysis. Fixed costs are costs that generally remain unchanged with changes in the level of production within a relevant range. Examples include rent, salaries of permanent employees and insurance. Variable costs change according to the volume of production. Raw materials, packaging and some forms of direct labour are common examples. Total cost is the sum of fixed __________ ___ ______ ________ ____.
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