The Total Cost (TC)of an Item Is Calculated as TC

question 97

Multiple Choice

The total cost (TC) of an item is calculated as TC = F + VX,where V is the

• A)estimated volume of production
• B)variable cost per unit of activity.
• C)total variable costs
• D)actual volume of production

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Definitions:

Variable Costs

Costs that change in proportion to the level of output or activity.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, wages, and debt repayments.

Total Fixed Costs

The sum of all costs required to produce any amount of a product that does not change with the level of production.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and labor.