BUISENESS MANAGEMENT
MARKETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total cost is worked out using which formula?
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Fixed costs + variable costs
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Fixed costs / variable costs
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Fixed costs x variable costs
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Fixed costs / variable costs
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Explanation:
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.
Detailed explanation-2: -Consequently, total cost is fixed cost (FC) plus variable cost (VC), or TC = FC + VC = Kr+Lw.
Detailed explanation-3: -The first method works by using this simple formula: Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
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