Type of cost

Production cost is mainly divided into 3 parts.

1. total cost

The cost or cost of producing any product. That is called total cost. A business produces 20 atta per unit of Rs 10 per unit for allowance. Its total cost is Rs.200. Within the total cost of production of goods, most of the following expenses can be incurred. For example, the cost of the land, the cost of labor, the cost of labor, the interest that is given on the basis of the arrangement, the cost of the raw material, the cost of machinery, the cost of general profit, advertising expenses, etc. can be included in the total cost of production.


average cost

The quotient is obtained by dividing the total cost by the total quantity of goods produced. It is called average cost. Average cost is the unit cost of any good.

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Average Cost – Total Cost

Total production

Suppose the total cost of producing 50 units of any product is Rs 1000, then the cost per unit is Rs 20. This is called average cost.


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Average cost Total cost

Total production


1000

50.. 20

Marginal cost

Marginal cost is the cost of producing a marginal unit of a good or the last unit of production. In other words, the increase in total cost of producing one additional unit of a good. That is called marginal cost. For allowance, if any product has 10 in production, its total production is kept at 500. In addition to that, an additional unit of knowledge is added, so the cost of production is 55%. Adding one unit here increases the cost by 5%. Rs 50 is called marginal cost.


Marginal Cost Total Cost Change

Change in volume of production