To forecast total costs at a given level of production, management would use which of the following calculations?
A)Average cost × total units predicted
B)Total fixed cost × total units predicted
C)Total fixed cost + (variable cost per unit × total units predicted)
D)Total fixed cost + variable cost per unit

Question

Quizplus · Accepted Answer

To forecast total costs at a given level of production, management would use the formula Total fixed cost + (variable cost per unit x total units predicted). This formula takes into account both the fixed costs and the variable costs that are incurred with producing a certain level of output. The other options, like A and D, do not take into account fixed costs, while option B only considers fixed costs and does not include variable costs.

To Forecast Total Costs at a Given Level of Production