COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is the correct formula to calculate total costs?
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Total costs minus total variable costs
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Total fixed costs plus total variable costs
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Total costs plus total variable costs
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Total fixed costs minus total variable costs
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Explanation:
Detailed explanation-1: -The correct answer is option A. Total mixed cost = (variable cost per unit x number of units) + total fixed cost .
Detailed explanation-2: -Consequently, total cost is fixed cost (FC) plus variable cost (VC), or TC = FC + VC = Kr+Lw.
Detailed explanation-3: -Total Fixed Cost TFC:-The total amount of money spends on fixed factors of production is called fixed cost.It can be obtained by subtracting total variable cost from total costTFC = TC-TVCTotal Variable Cost TVC:-The total amount of money spends on variable factors of production is called total variable cost.
There is 1 question to complete.