JMJ MARIST BROTHERS

NOTRE DAME OF MARBEL UNIVERSITY

COLLEGE OF BUSINESS AND ADMINISTRATION
City of Koronadal 9506
South Cotabato, Philippines

Name: Cabarrubias, Rosario G. Course & Year: BSMA-2

Date: November 20,2020

Module 7-Assignment: Describe the following terms:

1. Cost

The word Cost simply defines as to the amount of money needed to buy, do or make
something. It other terms, cost is the monetary value of goods and services that
producers and consumers both purchase

2. Total Cost

The word total cost, from the word total which defines as the amount you get when
several  amounts are added together and cost is the amount of money needed to buy,
do or make something. Thus, the word “Total cost” is defined as the sum of all total
expenses paid and incurred to produce a product, purchase, or acquire an investment

3. Total Variable Cost

Defines as the total sum of all the variable costs that would change in the proportion
to the output or the production of units and therefore helps in analyzing the overall
costing and profitability of the company. It can be calculated as the multiplying the
number of units produced with the Variable cost per unit.

4. Total Fixed Costs

Total fixed costs are the sum of all consistent, non-variable expenses a company
must pay. The total cost is fixed for the given period of time and for the given
production levels.
 JMJ MARIST BROTHERS
NOTRE DAME OF MARBEL UNIVERSITY
COLLEGE OF BUSINESS AND ADMINISTRATION
City of Koronadal 9506
South Cotabato, Philippines

5. Average Total Cost

Average Total Cost defines as one of three average cost concepts important to

short-run production analysis. The other two
are average fixed cost and average variable cost. A related concept is
marginal cost. Average total cost is the total cost per unit of output incurred when a
firm engages in short-run production.

6. Average Variable Cost

Average Variable Cost refers to the variable cost of per unit of the goods or services
including materials and labor where the variable cost is the cost that directly varies with
respect to the output and is calculated by dividing the total variable cost during the
period by the number of the units.

7. Average Total Cost

Fixed costs are defined as the expenses that are independent of the number of
goods or services a business produces. Average fixed cost is a management accounting
formula that measures the fixed production expenses per good produced by dividing
total fixed-costs by number of units produced. It is used to calculate how much costs
should be allocated to each unit of production. MC indicates the rate at which the total
cost of a product changes as the production increases by one unit.

8. Marginal Cost

Marginal Cost is the additional cost incurred for the production of an additional unit of
output. To calculate marginal cost, the formula is calculated by dividing the change in
the total cost by the change in the product output. MC is particularly important in the
business decision-making process. Management has to make decisions on where to
best allocate resources in the production process. For instance, when the management
needs to decide whether to increase production or not, they have to compare the
 JMJ MARIST BROTHERS
NOTRE DAME OF MARBEL UNIVERSITY
COLLEGE OF BUSINESS AND ADMINISTRATION
City of Koronadal 9506
South Cotabato, Philippines

marginal cost with the marginal revenue that will be realized by an additional unit of
output.

References:

 Dictionary.cambridge.org. (n.d.) TOTAL | Meaning In The Cambridge English Dictionary. Retrieved on

November 22, 2020 from https://dictionary.cambridge.org/dictionary/english/total
 Dictionary.cambridge.org. (n.d.) COST | Meaning In The Cambridge English Dictionary. Retrieved on
November 22, 2020 from https://dictionary.cambridge.org/dictionary/english/cost
 Total Variable Cost (Definition, Formula). (n.d.). | How To Calculate?. WallStreetMojo. Retrieved on
November 22, 2020 from https://www.wallstreetmojo.com/total-variable-cost-formula/
 My Accounting Course. (n.d.). What Is Total Cost? - Definition | Meaning | Example. Retrieved on
November 23, 2020 from https://www.myaccountingcourse.com/accounting-
dictionary/total-cost
 Average Variable Cost Formula. (n.d.). How To Calculate? (Examples).WallStreetMojo. Retrieved on
November 23, 2020 from https://www.wallstreetmojo.com/average-variable-cost-formula/
 My Accounting Course. (n.d.). What Is Average Fixed Cost? - Definition | Meaning | Example.
Retrieved on November 23, 2020 from https://www.myaccountingcourse.com/accounting-
dictionary/average-fixed-cost
 My Accounting Course. (n.d.) What Is Average Fixed Cost? - Definition | Meaning | Example
Retrieved on November 23, 2020 from https://www.myaccountingcourse.com/accounting-
dictionary/average-fixed-cost