COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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TOTAL COST = VARIABLE COSTS X FIXED COSTS
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TOTAL COST = VARIABLE COSTS + FIXED COSTS
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TOTAL COST = REVENUE-VARIABLE COSTS
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TOTAL COST = REVENUE-FIXED COSTS
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Detailed explanation-1: -Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost. You can use this fixed cost formula to help.
Detailed explanation-2: -Consequently, total cost is fixed cost (FC) plus variable cost (VC), or TC = FC + VC = Kr+Lw.
Detailed explanation-3: -The first method works by using this simple formula: Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
Detailed explanation-4: -In some cases, businesses only list their total costs and variable costs per unit. You can use this information to determine your fixed costs with the formula: Fixed Cost = Total Cost – (Variable Cost Per Unit * Units Produced).