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    Module 7 Assignment

    Uploaded by

    Rosario Cabarrubias
    This document defines several economic terms related to costs: 1) Cost is the amount of money needed to purchase, produce, or acquire something. Total cost is the sum of all expenses to produce a product or investment. 2) Total variable cost is the total of all costs that vary with output. Total fixed costs are expenses that remain constant regardless of output levels. 3) Average total cost is total cost per unit of output. Average variable cost is variable cost per unit. Average fixed cost divides total fixed costs by units produced. 4) Marginal cost is the change in total cost from producing one additional unit of output. It is used to determine how to allocate resources efficiently.

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    Module 7 Assignment

    Uploaded by

    Rosario Cabarrubias
    43 views3 pages
    This document defines several economic terms related to costs: 1) Cost is the amount of money needed to purchase, produce, or acquire something. Total cost is the sum of all expenses to produce a product or investment. 2) Total variable cost is the total of all costs that vary with output. Total fixed costs are expenses that remain constant regardless of output levels. 3) Average total cost is total cost per unit of output. Average variable cost is variable cost per unit. Average fixed cost divides total fixed costs by units produced. 4) Marginal cost is the change in total cost from producing one additional unit of output. It is used to determine how to allocate resources efficiently.

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    Module 7 cbme

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    This document defines several economic terms related to costs: 1) Cost is the amount of money needed to purchase, produce, or acquire something. Total cost is the sum of all expenses to produce a product or investment. 2) Total variable cost is the total of all costs that vary with output. Total fixed costs are expenses that remain constant regardless of output levels. 3) Average total cost is total cost per unit of output. Average variable cost is variable cost per unit. Average fixed cost divides total fixed costs by units produced. 4) Marginal cost is the change in total cost from producing one additional unit of output. It is used to determine how to allocate resources efficiently.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    43 views3 pages

    Module 7 Assignment

    Uploaded by

    Rosario Cabarrubias
    This document defines several economic terms related to costs: 1) Cost is the amount of money needed to purchase, produce, or acquire something. Total cost is the sum of all expenses to produce a product or investment. 2) Total variable cost is the total of all costs that vary with output. Total fixed costs are expenses that remain constant regardless of output levels. 3) Average total cost is total cost per unit of output. Average variable cost is variable cost per unit. Average fixed cost divides total fixed costs by units produced. 4) Marginal cost is the change in total cost from producing one additional unit of output. It is used to determine how to allocate resources efficiently.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 3

    JMJ MARIST BROTHERS

    NOTRE DAME OF MARBEL UNIVERSITY


    COLLEGE OF BUSINESS AND ADMINISTRATION
    City of Koronadal 9506
    South Cotabato, Philippines

    Name: Cabarrubias, Rosario G. Course & Year: BSMA-2


    Date: November 20,2020

    Module 7-Assignment: Describe the following terms:

    1. Cost

    The word Cost simply defines as to the amount of money needed to buy, do or make
    something. It other terms, cost is the monetary value of goods and services that
    producers and consumers both purchase

    2. Total Cost

    The word total cost, from the word total which defines as the amount you get when
    several  amounts are added together and cost is the amount of money needed to buy,
    do or make something. Thus, the word “Total cost” is defined as the sum of all total
    expenses paid and incurred to produce a product, purchase, or acquire an investment

    3. Total Variable Cost

    Defines as the total sum of all the variable costs that would change in the proportion
    to the output or the production of units and therefore helps in analyzing the overall
    costing and profitability of the company. It can be calculated as the multiplying the
    number of units produced with the Variable cost per unit.

    4. Total Fixed Costs


    Total fixed costs are the sum of all consistent, non-variable expenses a company
    must pay. The total cost is fixed for the given period of time and for the given
    production levels.
    JMJ MARIST BROTHERS
    NOTRE DAME OF MARBEL UNIVERSITY
    COLLEGE OF BUSINESS AND ADMINISTRATION
    City of Koronadal 9506
    South Cotabato, Philippines

    5. Average Total Cost

    Average Total Cost defines as one of three average cost concepts important to


    short-run production analysis. The other two
    are average fixed cost and average variable cost. A related concept is
    marginal cost. Average total cost is the total cost per unit of output incurred when a
    firm engages in short-run production.

    6. Average Variable Cost

    Average Variable Cost refers to the variable cost of per unit of the goods or services
    including materials and labor where the variable cost is the cost that directly varies with
    respect to the output and is calculated by dividing the total variable cost during the
    period by the number of the units.

    7. Average Total Cost

    Fixed costs are defined as the expenses that are independent of the number of
    goods or services a business produces. Average fixed cost is a management accounting
    formula that measures the fixed production expenses per good produced by dividing
    total fixed-costs by number of units produced. It is used to calculate how much costs
    should be allocated to each unit of production. MC indicates the rate at which the total
    cost of a product changes as the production increases by one unit.

    8. Marginal Cost

    Marginal Cost is the additional cost incurred for the production of an additional unit of
    output. To calculate marginal cost, the formula is calculated by dividing the change in
    the total cost by the change in the product output. MC is particularly important in the
    business decision-making process. Management has to make decisions on where to
    best allocate resources in the production process. For instance, when the management
    needs to decide whether to increase production or not, they have to compare the
    JMJ MARIST BROTHERS
    NOTRE DAME OF MARBEL UNIVERSITY
    COLLEGE OF BUSINESS AND ADMINISTRATION
    City of Koronadal 9506
    South Cotabato, Philippines

    marginal cost with the marginal revenue that will be realized by an additional unit of
    output.

    References:

     Dictionary.cambridge.org. (n.d.) TOTAL | Meaning In The Cambridge English Dictionary. Retrieved on


    November 22, 2020 from https://dictionary.cambridge.org/dictionary/english/total
     Dictionary.cambridge.org. (n.d.) COST | Meaning In The Cambridge English Dictionary. Retrieved on
    November 22, 2020 from https://dictionary.cambridge.org/dictionary/english/cost
     Total Variable Cost (Definition, Formula). (n.d.). | How To Calculate?. WallStreetMojo. Retrieved on
    November 22, 2020 from https://www.wallstreetmojo.com/total-variable-cost-formula/
     My Accounting Course. (n.d.). What Is Total Cost? - Definition | Meaning | Example. Retrieved on
    November 23, 2020 from https://www.myaccountingcourse.com/accounting-
    dictionary/total-cost
     Average Variable Cost Formula. (n.d.). How To Calculate? (Examples).WallStreetMojo. Retrieved on
    November 23, 2020 from https://www.wallstreetmojo.com/average-variable-cost-formula/
     My Accounting Course. (n.d.). What Is Average Fixed Cost? - Definition | Meaning | Example.
    Retrieved on November 23, 2020 from https://www.myaccountingcourse.com/accounting-
    dictionary/average-fixed-cost
     My Accounting Course. (n.d.) What Is Average Fixed Cost? - Definition | Meaning | Example
    Retrieved on November 23, 2020 from https://www.myaccountingcourse.com/accounting-
    dictionary/average-fixed-cost

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