Final answer:
The correct formula for total mixed cost is the sum of the total variable cost (Variable cost per unit multiplied by Number of units) and the Total fixed cost.
Step-by-step explanation:
The accurate formula for calculating total mixed cost is indeed option C) Total mixed cost = (Variable cost per unit × Number of units) + Total fixed cost. Mixed costs are those that comprise both variable and fixed components. The variable cost fluctuates in direct proportion to the level of output or production, while the fixed cost remains constant regardless of the quantity produced.
To calculate the total mixed cost, the first step is determining the total variable cost. This is achieved by multiplying the variable cost per unit by the actual number of units produced. The variable cost per unit represents the portion of the mixed cost that varies with changes in production levels.
Mathematically, the formula for total variable cost is expressed as Variable cost per unit × Number of units.
Subsequently, the total fixed cost is added to the total variable cost to obtain the comprehensive mixed cost. The fixed cost remains constant irrespective of variations in production volume.
Therefore, the formula for total mixed cost is represented as (Variable cost per unit × Number of units) + Total fixed cost. This formula provides a comprehensive view of the overall cost structure, incorporating both variable and fixed components. Accurate determination of the total mixed cost is vital for businesses in budgeting, pricing decisions, and overall financial planning, allowing for a clear understanding of the cost implications associated with different levels of production.