Cost structure refers to the various types of expenses a business incurs, and it is typically composed of fixed and variable costs. Fixed costs are costs that remain unchanged regardless of the amount of output a company produces, while variable costs change with production volume.Operating a business must incur some kind of costs, whether it is a retail business or service provider. Cost structures differ between retailers and service providers, thus the expense accounts appearing on a financial statement depend on the cost objects, such as a product, service, project, customer, or business activity. Even within a company, cost structure may vary between product lines, divisions or business units, due to the distinct types of activities they perform.