Total costs may be computed as follows:
A) Fixed costs + (Variable costs per unit × Unit volume)
B) (Fixed costs per unit × Unit volume) + Variable costs
C) Fixed costs per unit + (Variable costs per unit × Unit volume)
D) (Fixed costs per unit × Unit volume) + Variable costs per unit

Question

Quizplus · Accepted Answer

Total costs in a business are calculated by adding fixed costs to the product of variable costs per unit and the number of units produced or sold (Variable costs per unit × Unit volume). Fixed costs remain constant regardless of the volume of goods or services produced, while variable costs change with production volume.

Total Costs May Be Computed as Follows