A cost can be either variable or fixed:

• Variable Costs: these costs change with the amount of production or the amount of work. Examples include the cost of material, supplies, and wages.
• Fixed Costs: these costs do not change as production changes. Examples include the cost of set-up, rent, utilities, etc.

A cost can also be either direct or indirect:

• Direct Costs: these costs are directly attributable to the work on the project. Examples are team travel, team wages, recognition, and costs of materials used on the project.
• Indirect Costs: indirect costs are overhead items or costs incurred for the benefit of more than one project. Examples include taxes, fringe benefits, and janitorial services.

You should be familiar with these types of cost as you prepare to take the PMP exam.