Which of the following is included in total cost?

Total cost comprises both fixed and variable costs. Fixed costs are those that do not change with the level of output, such as rent or salaries, meaning they remain constant regardless of production levels. Variable costs, on the other hand, fluctuate with production volume, such as materials or labor costs that are directly tied to the amount of goods produced.

By summing fixed and variable costs, businesses can determine the full cost of production over a given time period. This total cost is crucial for companies to assess profitability, set prices, and make informed economic decisions. Understanding that both cost types contribute to total cost provides a clearer picture of the financial health of a business and its operational efficiency.