COST ACCOUNTING
FINANCIAL TERMINOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Variable + current assets
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Fixed-cost of sales
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Fixed costs + variable costs
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Fixed costs + cost of sales
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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. Let’s use a real-world example.
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.
Detailed explanation-4: -Total fixed costs are the sum of all consistent, non-variable expenses a company must pay. For example, suppose a company leases office space for $10, 000 per month, rents machinery for $5, 000 per month, and has a $1, 000 monthly utility bill. In this case, the company’s total fixed costs would be $16, 000.