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Cost Formula Equation
A mathematical equation used to predict costs, considering both fixed and variable components.
Fixed Component
The portion of a cost or expense that remains constant regardless of changes in the volume of goods or services produced or sold.
Dependent Variable
A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX.
Fixed Cost
Costs that do not change with the level of production or sales, such as rent or salaries.
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