2. Breakdown and definition of technical costs

Costs can be considered in terms of whether or not they can be allocated directly to a product or activity. A distinction is made between :

• direct costs: in most cases, these are costs that disappear with production (labor, materials, tools, machine use, etc.);

• indirect costs: these represent the expenses required for production, but which cannot be allocated to a specific product (insurance, management, etc.).

Allocating indirect costs is a delicate operation. It essentially depends on strategic choices made by the company's management. As a result, we won't be talking about these induced costs, known as structural costs.