The article discusses how production costs are categorized and managed to improve competitiveness in the market. It explains that costs can be divided based on their origin, source, complexity, and production volume level. Total costs consist of fixed and variable costs, with average costs calculated per unit of production. Entrepreneurs aim to reduce costs by hiring cost managers and focusing on operating costs. The study analyzes the cost structure of a company called Modus d.o.o. from 2015 to 2016 to understand cost movements over time.