Although the cost structure of a firm considers the proportions of fixed and variable costs, these structures will differ depending on the firm itself and the particular industry.

Cost Structure

The composition of a company’s costs, including the ratio of fixed to variable costs and how these affect overall profitability.

Fixed Costs

Regardless of production or sales volumes, certain costs, like rent, salaries, and insurance, do not vary.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.