ECONOMICS

Detailed explanation-1: -Total fixed cost (TFC) is that cost which does not change with a change in the level of output. Total variable cost (TVC) is that cost which changes as the level of output changes. Total cost (TC) is the sum of total fixed cost and total variable fixed cost.

Detailed explanation-2: -Total cost is the sum of all fixed and variable costs. Using managerial accounting tools, business owners are able to look at a total cost and work backward into the fixed and variable components. This process is called cost analysis.

Detailed explanation-3: -Total Cost = Total Fixed Cost + Total Variable Cost. It can also be represented in a more advanced way as, Total Cost = (Average fixed cost + Average variable cost) x Number of units. This was all about the total cost formula, which is a very important concept for determining the total cost of production.

Detailed explanation-4: -Total cost – The sum of fixed cost and variable cost. Marginal costs – The extra (additional) cost of producing one more unit of output; equal to the change in total cost divided by the change in output (and, in the short run, to the change in total variable cost divided by the change in output).

Detailed explanation-5: -Total Fixed Cost (TFC) This refers to the costs incurred by a firm in order to acquire the fixed factors for production like cost of machinery, buildings, depreciation, etc. In short run, fixed factors cannot vary and accordingly the fixed cost remains the same through all output levels.