what are the differences between these type of cost terminologies 1- fixed cost and variable cost and incremental cost 2- Recurring costs and non-Recurring costs 3-DIRECT, INDIRECT COST 4-Overhead costs and STANDARD COSTS could you please give me an example for each in engineering economy

Ans 1) Fixed cost - It is the cost or expenditure which is constant throughout the production period and is not effected by the production level . Eg- rent of a factory or office, salary of employees etc are fixed cost which remains fixed irrespective of output level.

Variable cost- It is the expenditure which changes directly or in proportion to the variations in the level of output. It is effected by the production level. Eg- Direct labour cost, taxes paid by company etc are variable costs which varies with the production level.

Incremental cost - It is the cost which is incurred for production of additional unit of good. Eg- If a business produces 100 units of a good and it's cost is $1000 and now it decides to produce 10 more units. So the cost incurred for production of 10 additional units will be called incremental cost.

2) Recurring cost - The cost which is anticipated and is incurred at regular gaps is called Recurring cost.Eg - expenditure on electricity facility in production of goods, annual maintenance expenditure etc are the costs which are incurred at regular intervals so they are called Recurring costs.

Non recurring cost - The cost which are sometimes not anticipated and are incurred at irregular intervals are called Non recurring cost.Eg- cost incurred on installation of new machine , any emergency expense on maintenance etc are those costs which does not occur regularly so they are called Non recurring costs.

3) Direct cost- The costs which are directly associated with the manufacturing of a specific good or service are called direct cost. Eg - direct labour cost , direct material cost and piece wage rate system are examples of direct cost which are directly linked with the production of specific goods.

Indirect cost - The cost which are not associated with the production of some specific good or service, they are incurred for more then one business activity is called indirect cost.Eg- Cost incurred on quality control , salaries for production supervision and depreciation are some examples of indirect cost

4) Overhead cost - The costs incurred for the running of business or operating a business is called overhead cost.They are not linked to production of goods or services rather they are the expenditures which are incurred by the company to stay in its business.Eg - Accounting fees , insurance cost ,rent and repairs, telephone bills , legal charges etc are all overhead costs which are incurred for running a business and for production of specific goods or services.

Standard cost- The cost which are predetermined and estimated for production of future good and services are called standard costs.They are used for setting targets for comparison between actual cost incurred and standard cost.Eg - On the basis of previous data , the company is expected to produce 1000 units of a good with raw material approximately 1 pound costing $2 dollars and labour cost of $ 20 dollars for 1 hour.So these are the standard costs of labour and material for production of 1000 units