Cost categories
Author: Hector
Cost categories
The classification of costs by product or service can be performed under one or more criteria:
Costs attributable directly or indirectly providing the service or product development:
Direct costs: costs are specifically and exclusively to a product or service, such as web servers associated with Internet services.
Indirect costs: those that we are specific and unique services, such as “connectivity” of the IT organization so dependent on Web services as the overall communications platform itself. These costs are harder to identify and are usually apportioned among the various services and products.
Costs depend on whether or not the “how”:
Fixed costs: are independent of production volume and are usually related to plant and equipment expenditures.
Variable costs: costs include those that depend on production volume and encompass, for example, the cost of personnel providing services, consumables, etc.
Costs depend on the time horizon
Capital costs, that comes from the depreciation of fixed assets or long-term investments.
Operating costs: are the costs associated with the daily operation of the IT organization.
Cost Types
It is essential to distinguish between different types of costs to design a pricing policy clear and consistent.