cost structure
How spending divides
Cost structure refers to the types and proportions of costs a business incurs to operate.
It encompasses fixed costs like rent and salaries, variable costs that change with production volume, and the overall balance between them.
Their cost structure was too heavy on fixed expenses to survive the downturn.
Understanding cost structure helps businesses identify where money goes and how changes in activity affect profitability.
- fixed costsExpenses unchanged by output
- operating costsRegular expenses for functioning
- variable costsExpenses changing with output
- direct costsCosts traceable to production
- overhead costsOngoing operational expenses
pricing strategy · price point · sunk costs · depreciation · zero-based budgeting · externalities · profit margin · thin margins · bottom line · cutting corners · margins · cash burn · making ends meet · pricing · breakeven · resource allocation · profit · expenses
- business financeaccounting, balance sheet, revenue stream, profit margin, budget
- cost accountingdirect costs, indirect costs, fixed costs, variable costs, overhead
- transport financeoperating costs, passenger fares, pricing strategy, baggage fees, landing fees
- market economicsmonopoly, oligopoly, perfect competition, duopoly, monopsony
- Startupsstartup, founder, founders, startups, co-founder
- trade secretstrade secret, secret recipe, proprietary blend, formula, chemical formula
cost structureefficiency gains
Improved resource utilization results
cost savings · profit margins · economies of scale · value creation · productivity gains