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# PPT - Cost Concept B Com Notes | EduRev

## B Com : PPT - Cost Concept B Com Notes | EduRev

``` Page 1

Cost Concepts
Cost Concepts
Page 2

Cost Concepts
Cost Concepts Cost Concept:
Cost Concept:
?

It is used for analyzing the cost of a
It is used for analyzing the cost of a
project in short and long run.
project in short and long run.
Page 3

Cost Concepts
Cost Concepts Cost Concept:
Cost Concept:
?

It is used for analyzing the cost of a
It is used for analyzing the cost of a
project in short and long run.
project in short and long run.
Types of Cost:
Types of Cost:
?
Total fixed costs (TFC)
Total fixed costs (TFC)
?
Average fixed costs (AFC)
Average fixed costs (AFC)
?
Total variable costs (TVC)
Total variable costs (TVC)
?
Average variable cost (AVC)
Average variable cost (AVC)
?
Total cost (TC)
Total cost (TC)
?
Average total cost (ATC)
Average total cost (ATC)
?
Marginal cost (MC)
Marginal cost (MC)
Page 4

Cost Concepts
Cost Concepts Cost Concept:
Cost Concept:
?

It is used for analyzing the cost of a
It is used for analyzing the cost of a
project in short and long run.
project in short and long run.
Types of Cost:
Types of Cost:
?
Total fixed costs (TFC)
Total fixed costs (TFC)
?
Average fixed costs (AFC)
Average fixed costs (AFC)
?
Total variable costs (TVC)
Total variable costs (TVC)
?
Average variable cost (AVC)
Average variable cost (AVC)
?
Total cost (TC)
Total cost (TC)
?
Average total cost (ATC)
Average total cost (ATC)
?
Marginal cost (MC)
Marginal cost (MC)
Fixed Costs(FC)
Fixed Costs(FC)
Fixed Cost denotes the costs which do not
Fixed Cost denotes the costs which do not
vary with the level of production. FC is
vary with the level of production. FC is
independent of output.
independent of output.
Eg:
Eg:

Depreciation, Interest Rate, Rent, Taxes
Depreciation, Interest Rate, Rent, Taxes
?
Total fixed cost (TFC):
Total fixed cost (TFC):

All costs associated with the fixed input.
All costs associated with the fixed input.
?
Average fixed cost
Average fixed cost
per unit of output:
per unit of output:

AFC  =  TFC /Output
AFC  =  TFC /Output
Page 5

Cost Concepts
Cost Concepts Cost Concept:
Cost Concept:
?

It is used for analyzing the cost of a
It is used for analyzing the cost of a
project in short and long run.
project in short and long run.
Types of Cost:
Types of Cost:
?
Total fixed costs (TFC)
Total fixed costs (TFC)
?
Average fixed costs (AFC)
Average fixed costs (AFC)
?
Total variable costs (TVC)
Total variable costs (TVC)
?
Average variable cost (AVC)
Average variable cost (AVC)
?
Total cost (TC)
Total cost (TC)
?
Average total cost (ATC)
Average total cost (ATC)
?
Marginal cost (MC)
Marginal cost (MC)
Fixed Costs(FC)
Fixed Costs(FC)
Fixed Cost denotes the costs which do not
Fixed Cost denotes the costs which do not
vary with the level of production. FC is
vary with the level of production. FC is
independent of output.
independent of output.
Eg:
Eg:

Depreciation, Interest Rate, Rent, Taxes
Depreciation, Interest Rate, Rent, Taxes
?
Total fixed cost (TFC):
Total fixed cost (TFC):

All costs associated with the fixed input.
All costs associated with the fixed input.
?
Average fixed cost
Average fixed cost
per unit of output:
per unit of output:

AFC  =  TFC /Output
AFC  =  TFC /Output
Variable Costs(VC)
Variable Costs(VC)
Variable Costs is the rest of total cost, the part that
Variable Costs is the rest of total cost, the part that
varies as you produce more or less. It depends
varies as you produce more or less. It depends
on Output.
on Output.
Eg: Increase of output with labour.
Eg: Increase of output with labour.
?
Total variable cost (TVC):
Total variable cost (TVC):

All costs associated with the variable
All costs associated with the variable
input.
input.
?
Average variable cost
Average variable cost
- cost per unit of output:
- cost per unit of output:

AVC  =  TVC/ Output
AVC  =  TVC/ Output
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## Cost Accounting

131 videos|139 docs

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