hi we are showing u the basic concpts of cost estiation

2. COSTCONCEPT- IT REFERS TO THE AMOUNT OF PAYMENT MADE TO
ACQUIRE ANY GOODS AND SERVICES.
TYPESOF COST:
TOTAL FIXED COST (TFC)
TOTAL VARIABLE COST (TVC)
TOTAL COST (TC)
AVERAGE FIXED COST (AFC)
AVERAGE VARIABLE COST (AVC)
AVERAGE COST (AC)
MARGINAL COST (MC)

3. • TOTAL FIXED COST – IT REFERS TO THE COST WHICH DOES NOT CHANGE WITH CHANGE IN LEVEL
OF INPUT.
EXAMPLE: RENT, INSURANCE, SALARIES, ETC
• TOTAL VARIABLE COST – IT REFERS TO THE COST WHICH VARY DIRECTLY TO THE LEVEL OF INPUT.
EXAMPLE- DIRECT LABOUR, ENERGY AND RAW MATERIAL COST
• TOTAL COST – THE SUM OF ALL COST INCURRED BY A FIRM IN A PRODUCING A CERTAIN LEVEL OF
OUTPUT.
• AVERAGE FIXED COST – IT REFERS TO PERT UNIT OF TOTAL FIXED COST.
• AVERAGE VARIABLE COST – IT REFERS TO PER UNIT OF TOTAL VARIABLE COST.
• AVERAGE COST – IT REFERS TO PER UNIT TOTAL COST OF PRODUCTION
• MARGINAL COST – IT REFERS TO ADDITION TO TOTAL COST EHEN ONE MORE UNIT OF OUTPUT IS
PRODUCED.