Identify and define five types of project costs

Question

What will be an ideal response?

Answer 1

Direct costs, indirect costs, fixed costs, variable costs, and overhead costs are five types of costs. Direct material and labor costs are the costs of materials that are entirely linked to the production of the final product. Indirect costs include any material and labor costs that are necessary to complete a project, but do not become an actual part of the final project. Fixed costs remain constant regardless of changes in the level of project activities. Variable costs vary in direct proportion to changes in the level of project activities. Overhead costs are primarily those indirect costs associated with project implementation.