 Author Topic: Cost Analysis  (Read 74 times) Md. Alamgir Hossan

• Hero Member
•     • Posts: 837
• Test Cost Analysis
« on: April 04, 2017, 04:14:21 PM »
What is cost?
Cost is the Amount of money spends to produce goods.
Types of cost:
   Fixed cost
   Variable cost
   Total cost
   Marginal cost
   Average cost
   Average variable cost
   Average fixed cost

Fixed Cost: Costs that don’t change based on production.
Example: Rent.
Variable Cost: Costs that change with rate of production.
Example: Cost of raw materials.
Total cost: Total economic cost of production consisting of fixed and variables costs.
Total costs= Fixed Costs + Variable Costs.
Marginal Costs: Marginal cost is the addition to the total  cost on account of producing one additional unit of product.
MC=Change in TC/Change in Q.
Average Costs: Average cost is not actual cost. It is  obtained by dividing the total cost by the total output.
AC=TC/Q.
Average Variable Costs:  Average Variable Costs is the addition to the total variable cost per unit of production.