Question

Veritas is a startup that makes running t-shirts using high-tech fabric. The company has the following cost structure:

Total cost = $50,000 + ($25 × number of t-shirts)

​

The amount $25:

Group of answer choices

is the mixed rate.

is the variable rate.

is the committed variable.

is the dependent variable.

The amount $50,000 is the:

Group of answer choices

Overhead Rate

Cost of Direct Material

Cost of Good Sold

Fixed Cost

Total Variable Cost

Answer 1

What is Total Cost Formula?

The term “total cost” refers to the overall cost of production that involves both fixed and variable components of cost. The formula for total cost can be derived by adding the total fixed cost to the total variable cost. by the number of goods produced. Mathematically, it is represented as,

Total Cost = Total Fixed Cost + Total Variable Cost

Hence  The amount $25 is  the variable rate.

and The amount $50,000 is the: Fixed Cost