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Sometimes referred to as cost of inventory on hand, the inventoriable cost will include not only the cost of purchasing the items that are found in the inventory, but also all expenses that are related to using those items in the creation of products that are ultimately offered for sale.
All business costs can be classified as either variable costs or fixed costs. Fixed costs are those costs that do not change based on production levels, while variable costs increase or decrease based on production.Fixed costs can be assets like buildings and equipment.s mentioned above, fixed costs are one part of the total cost formula. The formula used to calculate costs is FC + VC(Q) = TC, where FC is fixed costs, VC is variable costs, Q is quantity, and TC is total cost.