Costs That Vary With the Quantity of Output Produced

Fixed costs are assumed to be constant at all levels of activity. They move in correlation with production volume in practice although not always in exact proportions.

Types Of Costs Direct Indirect Costs Fixed Variable Costs Efm

With this information per unit total costs can be calculated by dividing the quantity produced into the total cost.

. It is assumed that variable costs are proportional to output volume. Fixed expenses it should be mentioned tend to vary after a given degree of activity. Based on our sample month above per unit total costs would be 85000 30000.

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