Production Cost Notes 1/14/15

Fixed Cost- a cost that does not change no matter how much is produced.
                 Examples: rent, mortgage, insurance, salary

Variable Cost- a cost that rises or falls depending on how much is produced.
Example: electricity

Marginal Cost- cost of producing one more unit of a good.

**Revenue brings in money
** Cost is when money is gone

Acronyms
   Q- Quantity
TFC- Total Fixed Cost
TVC- Total Variable Cost
TC- Total Cost
MC- Marginal Cost
AFC- Average Fixed Cost
AVC- Average variable Cost
ATC- Average Total Cost


Formulas
TFC+TVC= TC                                

AFC+AVC= ATC

TFC
------ =AFC
   Q

TVC
------- = AVC
   Q

TC
----- = ATC
  Q

TFC= AFC * Q

TVC= AVC * Q

MC= New TC- Old TC

Here is a great video to reference at for business Mangement, cost of production, cost of supplies , balancing inventory with final product cost, and everything you need that revolves around money ! Copy and paste link below into a web browser ! Enjoy :)
https://m.youtube.com/watch?v=IqvoxkBAlEw