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Why is total cost greater than average variable cost?
Total cost is greater than average variable cost because total cost includes both variable costs and fixed costs, while average variable cost only accounts for variable costs per unit of output. Fixed costs remain constant regardless of the level of production, which means they contribute to the overall total cost but do not affect the average variable cost calculation. As production increases, the average variable cost may decrease due to spreading the variable costs over more units, but the total cost continues to rise. Therefore, total cost will always exceed average variable cost due to the inclusion of fixed costs.
Formula for total variable cost?
Total Variable Cost = Number of Units * Variable cost per unit
What is the formula to find the average variable cost?
Average Variable Cost = Total Variable Cost/ Quantity Average Cost = Average Fixed Cost + Average Variable Cost Average Cost = Total Cost/Quantity
How do you calculate Total Cost without Total variable cost?
To calculate the Total Cost without Total variable cost, one should estimate for the variables or substitute for the variables with a variable such as X or Y and then solve for the approximate total cost.
Is selling price and total variable cost the same?
Selling price = Total Cost (Total Variable cost + Total fixed cost) + profit margin
Why is total cost greater than average variable cost?
Total cost is greater than average variable cost because total cost includes both variable costs and fixed costs, while average variable cost only accounts for variable costs per unit of output. Fixed costs remain constant regardless of the level of production, which means they contribute to the overall total cost but do not affect the average variable cost calculation. As production increases, the average variable cost may decrease due to spreading the variable costs over more units, but the total cost continues to rise. Therefore, total cost will always exceed average variable cost due to the inclusion of fixed costs.
Formula for total variable cost?
Total Variable Cost = Number of Units * Variable cost per unit
Does total cost equal the fixed cost plus the vriable cost divides by volume?
Formula for Total Cost: Fixed Cost + Variable Cost + Semi-Variable Cost if there is no semi-variable cost then fixed cost + variable cost is a total cost. if we devide the total cost with volume as well then it will be cost per unit not total cost
Fixed cost variable cost equals?
Fixed cost and variable cost is equal to total cost as per following formula: Total Cost = Fixed Cost + Variable Cost
How do you calculate variable cost?
Variable cost = Total Cost/ fixed cost
What is the formula to find the average variable cost?
Average Variable Cost = Total Variable Cost/ Quantity Average Cost = Average Fixed Cost + Average Variable Cost Average Cost = Total Cost/Quantity
How do you calculate Total Cost without Total variable cost?
To calculate the Total Cost without Total variable cost, one should estimate for the variables or substitute for the variables with a variable such as X or Y and then solve for the approximate total cost.
How do you calculate variable cost per unit?
Variable cost per unit = Total variable cost / total number of units manufactured
Is selling price and total variable cost the same?
Selling price = Total Cost (Total Variable cost + Total fixed cost) + profit margin
When total variable cost may increase variable cost per unit is constant or no?
Total variable cost can increase while the variable cost per unit remains constant if the total quantity of output produced increases. In this scenario, the variable cost per unit does not change, but since more units are being produced, the overall total variable cost rises. Conversely, if the output level stays the same, an increase in total variable cost would imply an increase in the variable cost per unit.
How do you determine total costs?
Total cost is determined by adding fixed costs and variable costs together. fixed cost + variable cost = total cost
How does Decrease in material costs impact total variable costs?
If material cost is variable cost then yes by decreasing material cost company can reduce total variable cost.
