A. Total Costs
In the short run, some of the factors are fixed, while other factors are variable. In the same way, the short-run costs are also categorised into two different kinds of cost; viz., Fixed Costs and Variable Costs. The sum total of these costs is equal to the Total Cost.
1. Total Fixed Cost (TFC) or Fixed Cost (FC)
The costs on which the output level does not have a direct impact are known as Fixed Costs. For example, salary of staff, rent on office premises, interest on loans, etc. Other names of fixed costs are Supplementary Cost, Overhead Cost, Unavoidable Cost, Indirect Cost, or General Cost.
2. Total Variable Cost (TVC) or Variable Cost (VC)
The costs on which the output level has a direct impact are known as Variable Costs. For example, fuel, power, payment for raw materials, etc. Other names of variable costs are Prime Cost, Avoidable Cost, or Direct Cost.
3. Total Cost (TC)
The total expenditure incurred by an organisation on the factors of production which are required for the production of a commodity is known as Total Cost. In simple terms, total cost is the sum of total fixed cost and total variable cost at different output levels.
TC = TFC + TVC