Total Costs are equal to?

Total Costs are equal to?

• A. Fixed Costs plus Variable Costs
• B. Fixed Costs
• C. Variable Costs
• D. Contribution per unit

Answer: (A)

Total costs are the sum of fixed costs and variable costs. Fixed costs stay the same regardless of how much you produce, while variable costs change with the level of output. Add them together to get the total cost for a given level of production. For example, if fixed costs are 1,000 and variable costs total 1,000 when producing 200 units, total costs are 2,000. The other options don’t fit because fixed costs alone exclude the variable part, variable costs alone exclude the fixed part, and contribution per unit is selling price minus variable cost per unit, not total costs.

Total costs are the sum of fixed costs and variable costs. Fixed costs stay the same regardless of how much you produce, while variable costs change with the level of output. Add them together to get the total cost for a given level of production. For example, if fixed costs are 1,000 and variable costs total 1,000 when producing 200 units, total costs are 2,000. The other options don’t fit because fixed costs alone exclude the variable part, variable costs alone exclude the fixed part, and contribution per unit is selling price minus variable cost per unit, not total costs.