1. Copy and complete the table which shows output-cost relationship: Unit of Output ($) Fixed Cost (FC) ($) Variable Cost (VC) ($) Total Cost (TC) ($) Average Cost (AC) ($) Marginal Cost (MC) 1 20 ------ 80 80 80 2 20 130 ----- 75 ---- 3 20 190 210 ----- 60 4 20 ------
1. Copy and complete the table which shows output-cost relationship:
|
Unit of Output |
($) Fixed Cost (FC) |
($) Variable Cost (VC) |
($) Total Cost (TC) |
($) Average Cost (AC) |
($) Marginal Cost (MC) |
|
1 |
20 |
------ |
80 |
80 |
80 |
|
2 |
20 |
130 |
----- |
75 |
---- |
|
3 |
20 |
190 |
210 |
----- |
60 |
|
4 |
20 |
------ |
264 |
66 |
----- |
|
5 |
20 |
280 |
------ |
----- |
36 |
Fixed cost is fixed for a certain level of activity of production. It is termed as uncontrollable in Marginal Costing.
Variable cost vary according to change in units of production. More the output more will be the variable cost and vice versa.
Total cost is addition of variable and fixed cost. It is also termed as conversion cost.
Average cost is the per unit average of total cost.
Marginal cost is the additional cost of additional unit producted.
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