Total cost is the overall amount a business incurs to produce a certain level of output, combining both fixed costs (which do not vary with production, such as rent or salaries) and variable costs (which do vary with production, such as materials and direct labor). The basic idea is:
- Total Cost (TC) = Fixed Costs (FC) + Variable Costs (VC)
- TC can be calculated for any planned level of production by summing all fixed costs and all variable costs at that production level.
If you have a specific scenario or numbers (e.g., fixed costs, variable cost per unit, and number of units), share them and the exact formula or method you want (per unit vs. total), and the total cost can be computed or demonstrated step by step.
