Total fixed cost

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Chintan Patel (Querist)
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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!!!

CA PRAVEEN SINGH

CA PRAVEEN SINGH (Expert)
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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 Agarwal

CA Ayush Agarwal (Expert)
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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

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

CA PRAVEEN SINGH

CA PRAVEEN SINGH (Expert)
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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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