Total costs refer to the complete expenses incurred in producing goods or services. This includes both fixed costs, which remain constant regardless of production levels, and variable costs, which fluctuate based on the quantity produced. Understanding total costs is essential for businesses to set prices and determine profitability. Calculating total costs helps organizations make informed financial decisions. By analyzing these costs, companies can identify areas for improvement, optimize resource allocation, and enhance overall efficiency. This analysis is crucial for maintaining competitiveness in the market and ensuring long-term sustainability.