What Is the Formula for Total Fixed Cost?

What Is the Formula for Total Fixed Cost?

What Is the Formula for Total Fixed Cost?

The formula for total fixed cost is fixed costs plus variable costs multiplied by quantity equals total cost, or FC +VC(Q)=TC, according to Education Portal. Fixed costs are costs that do not change based on aspects such as production levels, where variable costs change based on production.

Fixed costs can include assets such as buildings and equipment. Education Portal states that while fixed costs can change based on factors such as availability or changes to a contract, they do not changed based on production levels. Variable costs change based on production levels, which means that a water bottle company will spend more money on bottles the more water bottles it produces. By adding the fixed cost to the variable cost times the quantity, the sum is the total cost.