ECONOMICS

Detailed explanation-1: -Production costs refer to all of the direct and indirect costs businesses face from manufacturing a product or providing a service.

Detailed explanation-2: -The costs involved in creating a product are called Product Costs. These costs include materials, labor, production supplies and factory overhead. The cost of the labor required to deliver a service to a customer is also considered a product cost.

Detailed explanation-3: -Cost of goods sold (COGS) definition It appears on an income statement and typically includes money spent on raw materials and labour. It does not include coss associated with marketing, sales or distribution. Cost of goods sold (COGS) is the direct cost of making a company’s products.

Detailed explanation-4: -Costs are broadly classified into four types: fixed cost, variable cost, direct cost, and indirect cost.

Detailed explanation-5: -Money Cost and Real Cost. Cost of Production measured in terms of money is called the “Money Cost”. Money cost is the monetary expenditure made by the producer for hiring various factors of production.