MANAGEMENT

Detailed explanation-1: -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).

Detailed explanation-2: -First, add up all production costs. Note which of those costs are fixed and which ones are variable. Take your total cost of production and subtract the variable cost of each unit multiplied by the number of units you produced. This will give you your total fixed cost.

Detailed explanation-3: -Companies incur two types of production costs: variable and fixed costs. Variable costs change based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output.

Detailed explanation-4: -As illustrated in the graph above, the point at which total fixed and variable costs are equal to total revenues is known as the break even point. At the break even point, a business does not make a profit or loss. Therefore, the break even point is often referred to as the “no-profit” or “no-loss point.”