11 TYPES OF PROJECT
COSTS IN PROJECT
“We have mentioned 11 types of
project costs that are an integral
part of project management.”
• Fixed costs - Fixed costs are those that do not change over
time or are unaffected by output. Building costs, legal fees,
and insurance, for example, are costs that remain constant
regardless of whether you produce goods or services.
Throughout the project's life cycle, it remains the same and
• Variable costs - These are the costs that fluctuate with the
passage of time and the availability of materials. For
example, if you produce more goods, such as cars, the cost
of raw materials will fluctuate because the metal required to
manufacture the car is more, requiring more raw materials.
Similarly, when output is low and there is a lull in
production, raw material costs fall. Variable costs are what
• Semi-variable costs - The costs may vary here, and they are
also required when producing goods. For example, if you
produce more cars, your staffing costs will rise. Even if you
don't make cars, you may require personnel to manage the
factory. As a result, these costs are referred to as semi-
• Opportunity costs - The costs are the same as if the next
best alternative was chosen. For example, if you invest
money in one of the car models, you won't be able to use
that money to create other models.
• Marginal costs - Costs incurred for producing an additional
number of items, for example, if the cost of three goods is
$200, the cost of the fourth item may be only $120.
• Avoidable costs - Costs can be avoided here, for example, if
you are not producing cars, you can avoid paying for raw
materials and energy, and so on.
• Accounting costs - This refers to the expenses incurred in
the production of specific items or goods.
• Economic costs - This includes direct costs, as well as
opportunity costs and accounting costs. For example, if you
go to training for a week, you lose $200 for the week and
$350 for t