# cost function

- A formula or equation that represents the way in which particular costs behave when plotted on a graph. For example, the most common cost function represents the total cost as the sum of the fixed costs and the variable costs in the equation
*y*=*a*+*bx*, where*y*is the total cost,*a*is the total fixed cost,*b*is the variable cost per unit of production or sales, and*x*is the number of units produced or sold.

*Accounting dictionary.
2014.*

### Look at other dictionaries:

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