ECONOMICS

Detailed explanation-1: -Total Cost of Production = Total Fixed Cost + Total Variable Cost. Now, the quantity of units that has been produced has to be determined. Finally, the average total cost of production is calculated by dividing the total cost of production calculated in step 3 by the number of units produced determined in step 4.

Detailed explanation-2: -Product costs are costs that are incurred to create a product that is intended for sale to customers. Product costs include direct material (DM), direct labor (DL), and manufacturing overhead (MOH).

Detailed explanation-3: -A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service, product, or department. Direct costs examples include direct labor and direct materials.

Detailed explanation-4: -Direct materials. Add the total cost of materials purchases in the period to the cost of beginning inventory, and subtract the cost of ending inventory. The result is the cost of direct materials incurred during the period.