Question

Explain the different types of Costs in a tabular format & with a well-labelled diagram.

Answer 1

The different types of cost are:-

a) Total cost

b) Variable cost

c) Fixed Cost

Explanation:

Total cost:- Total cost of production is the sum of all expenditure incurred in producing a given volume of output." The amount of money spent on the production of different levels of good is called total cost.

Variable Cost:- Variable costs refer to those costs which change with the change in the volume of output. These costs are unavoidable or contractual costs.

Fixed cost:- Fixed costs are costs that do not change with change in the quantity of output. These costs are also known as the overhead costs or indirect costs because a firm has to incur these costs even if it shuts down temporarily.