A company's total costs are calculated by:
A)subtracting total fixed costs from total variable costs.
B)subtracting total variable costs from total fixed costs.
C)adding total fixed costs to total variable costs.
D)subtracting total fixed costs and total variable costs from sales.

Question

Quizplus · Accepted Answer

The formula to calculate a company's total cost is to add total fixed costs to total variable costs. Fixed costs are expenses that do not change with the level of production, such as rent, while variable costs increase or decrease with activity, such as materials or labor. By adding both these costs, a business can determine its total operating expenses.

A Company's Total Costs Are Calculated By