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What Are the Four Parts of the Cost Hierarchy

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Essay

What are the four parts of the cost hierarchy. Briefly explain each part, and contrast this cost hierarchy to the fixed-variable dichotomy?


Definitions:

Bill

A short-term debt instrument issued by a government as a means of borrowing money with a maturity of less than a year.

Goods

Physical items that are produced, bought, or sold with the aim to satisfy the wants or needs of consumers.

Services

Actions or activities provided to satisfy the needs and wants of consumers without resulting in the ownership of a tangible product.

Seller

An individual or entity that offers goods or services for sale.

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