How to determine cost?

                                          COST ANALYSIS

                           cost analysis helps to measure the cost on the basis of inputs hired and productivity output.

AC=TC/Q

HERE , TC=FC+VC

AVERAGE COST(AC)

sum of all cost(total cost) divided by number of goods produced.

FIXED COST(FC)

expense cost that does not change in with change in goods

VARIABLE COST(VC)

the cost that changes with change in production period

Q=quantity of goods

Tc=sum of all costs

On the basis of average cost and total cost the company can determine profits from business opportunities.