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How do you calculate your variable cost and fixed cost given total costs and sales volumes?
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
What does total cost of production include?
Variable Costs and fixed costs
How can one determine the variable cost when given the fixed cost in a business scenario?
To determine the variable cost in a business scenario when given the fixed cost, you can subtract the fixed cost from the total cost. Variable costs are expenses that change based on the level of production or sales, while fixed costs remain constant regardless of production levels. By subtracting the fixed cost from the total cost, you can isolate the variable cost component.
What is the difference between average total costs and average variable costs?
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.
Relationship between fixed cost and variable cost?
There is a huge relationship between fixed cost and variable cost. These two costs are the opposite of each other.
