Total Cost and Variable Cost always increase(s) as output increases
What is total cost and example?
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
What is total cost formula?
The total cost formula is used to combine the variable and fixed costs of providing goods to determine a total. The formula is: Total cost = (Average fixed cost x average variable cost) x Number of units produced.
What do you mean variable cost?
A variable cost is an expense that changes in proportion to production output or sales. When production or sales increase, variable costs increase; when production or sales decrease, variable costs decrease.
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