Question

TVC = 400. TFC = 250. Calculate TC?

Answer 1

Total Cost (TC) = $650

Explanation:

The Total Cost (TC) is calculated by adding the Total Variable Cost (TVC) and the Total Fixed Cost (TFC). In this case, TVC is given as $400, and TFC is given as $250. Therefore,

`\[ TC = TVC + TFC \]`

`\[ TC = 400 + 250 = 650 \]`

So, the Total Cost is $650. The Total Cost represents the overall cost incurred by a business, including both variable and fixed costs. Variable costs are expenses that vary with the level of production or output, while fixed costs remain constant regardless of the production level.

In this scenario, the Total Cost of $650 is the sum of the variable costs of $400 and the fixed costs of $250. This calculation is fundamental in cost accounting, providing businesses with insights into their cost structure and helping them make informed decisions about pricing, production levels, and overall financial management. In summary, the Total Cost is the aggregate of all costs, combining both variable and fixed elements, to provide a comprehensive view of the expenses associated with a particular level of production.