What is the correct formula for determining total cost?
Understand the Problem
The question is asking for the appropriate formula to calculate total cost, which generally comprises fixed costs and variable costs. This can often be represented as Total Cost = Fixed Costs + Variable Costs.
Answer
Total Cost = Total Fixed Cost + Total Variable Cost.
The correct formula for determining the total cost is: Total Cost = Total Fixed Cost + Total Variable Cost.
Answer for screen readers
The correct formula for determining the total cost is: Total Cost = Total Fixed Cost + Total Variable Cost.
More Information
The total cost comprises both fixed and variable costs. Fixed costs are expenses that do not change with the amount of goods or services produced, while variable costs fluctuate with production volume.
Tips
A common mistake is to incorrectly categorize costs as fixed or variable, affecting the total cost calculation.
Sources
- Total cost formula - AccountingTools - accountingtools.com
- Total Cost | Definition, Formula & Calculation - Lesson - Study.com - study.com
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