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Total fixed cost

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(Querist)
25 August 2012 HELLO!!!Firstly,please explain the difference between TOTAL FIXED COST AND TOTAL VARIABLE COST in "DETAIL"...Secondly why doesn't TOTAL FIXED COST exist in the long run???Why does total fixed cost become total variable cost in long run???

-THANKING YOU IN ADVANCE!!!
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CA PRAVEEN SINGH

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CA PRAVEEN SINGH (Expert)
25 August 2012 FIXED COST REMAIN FIXED IRRESPECTIVE OF THE LEVEL OF PRODUCTION..
BUT VARIABLE COST IS VARRY ON THE BASIS OF PRODUCTION...
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CA AYUSH AGRAWAL

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CA AYUSH AGRAWAL (Expert)
25 August 2012 Fixed Cost is Unavoidable That You cant Avoid In Any Case.
so Not a Relevant Cost.

and Variable All Depend on Production.

so Decision are Taken on Basis of Variable.



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Chintan Patel

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Chintan Patel (Querist)
26 August 2012 but why in the long run TFC doesn't exist?
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CA PRAVEEN SINGH

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CA PRAVEEN SINGH (Expert)
26 August 2012 YES AGREE WITH AYUSH...

FIXED COST IS NOT RELEVENT COST FOR DECISION MAKING PURPOSE..

IT IS A UNAVOIDABLE COST....

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