Total Costs - GCSE Business Definition

Total costs combine all fixed and variable costs involved in the production process. Fixed costs remain constant regardless of the level of production, like rent and salaries. Variable costs fluctuate with production levels, such as raw materials and utility costs.

Understanding total costs is vital for GCSE Business students, as it is used to calculate profit and make pricing decisions. Knowing this concept enables businesses to determine how much they need to sell to cover costs and make a profit. This is crucial for financial planning and sustainability.