CA Foundation Exam > CA Foundation Questions > Which of the following statements is correct ...
Start Learning for Free
Which of the following statements is correct concerning the relationships among the firm’s functions?
- a)TC = TFC – TVC.
- b)TVC = TFC – TC.
- c)TFC = TC – TVC.
- d)TC = TVC – TFC.
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following statements is correct concerning the relationsh...
Explanation:
The correct statement among the given options is option C, which states that TFC = TC - TVC.
Understanding the terms:
- TC (Total Cost): It represents the total cost incurred by a firm in producing a given level of output. It includes both fixed costs (TFC) and variable costs (TVC).
- TFC (Total Fixed Cost): It represents the cost that does not change with the level of output. It remains constant regardless of the quantity produced.
- TVC (Total Variable Cost): It represents the cost that varies with the level of output. It increases as the quantity produced increases.
Explanation of the correct statement:
The correct statement, TFC = TC - TVC, can be explained as follows:
- Total cost (TC) is the sum of total fixed cost (TFC) and total variable cost (TVC). This is represented by the equation TC = TFC + TVC.
- Rearranging the equation, we get TFC = TC - TVC.
- This means that total fixed cost is equal to the difference between total cost and total variable cost.
Example:
Let's consider a hypothetical firm that produces shoes. The firm incurs fixed costs like rent, salaries, etc., which remain the same regardless of the quantity of shoes produced. These fixed costs are represented by TFC.
Additionally, the firm incurs variable costs like raw material costs, labor costs, etc., which vary with the quantity of shoes produced. These variable costs are represented by TVC.
The total cost incurred by the firm in producing a certain quantity of shoes is represented by TC.
Conclusion:
In conclusion, the correct statement is option C, which states that TFC = TC - TVC. This means that total fixed cost is equal to the difference between total cost and total variable cost.
The correct statement among the given options is option C, which states that TFC = TC - TVC.
Understanding the terms:
- TC (Total Cost): It represents the total cost incurred by a firm in producing a given level of output. It includes both fixed costs (TFC) and variable costs (TVC).
- TFC (Total Fixed Cost): It represents the cost that does not change with the level of output. It remains constant regardless of the quantity produced.
- TVC (Total Variable Cost): It represents the cost that varies with the level of output. It increases as the quantity produced increases.
Explanation of the correct statement:
The correct statement, TFC = TC - TVC, can be explained as follows:
- Total cost (TC) is the sum of total fixed cost (TFC) and total variable cost (TVC). This is represented by the equation TC = TFC + TVC.
- Rearranging the equation, we get TFC = TC - TVC.
- This means that total fixed cost is equal to the difference between total cost and total variable cost.
Example:
Let's consider a hypothetical firm that produces shoes. The firm incurs fixed costs like rent, salaries, etc., which remain the same regardless of the quantity of shoes produced. These fixed costs are represented by TFC.
Additionally, the firm incurs variable costs like raw material costs, labor costs, etc., which vary with the quantity of shoes produced. These variable costs are represented by TVC.
The total cost incurred by the firm in producing a certain quantity of shoes is represented by TC.
Conclusion:
In conclusion, the correct statement is option C, which states that TFC = TC - TVC. This means that total fixed cost is equal to the difference between total cost and total variable cost.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer?
Question Description
Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer?.
Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following statements is correct concerning the relationships among the firm’s functions?a)TC = TFC – TVC.b)TVC = TFC – TC.c)TFC = TC – TVC.d)TC = TVC – TFC.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup