Average Fixed Cost Calculator

Average Fixed Cost Formula

The formula to calculate the average fixed cost (AFC) is:

\[ \text{AFC} = \frac{\text{Total Fixed Cost (TFC)}}{\text{Number of Units}} \]

Description

The average fixed cost represents the fixed cost per unit of output. It is calculated by dividing the total fixed cost by the number of units produced.

Total Fixed Cost (TFC): The total amount of fixed costs incurred by the company.
Number of Units: The total number of units produced or sold by the company.

Example Calculation

Let's assume the following:

Total Fixed Cost (TFC): $250,000
Number of Units: 20,000

To calculate the average fixed cost:

\[ \text{AFC} = \frac{250,000}{20,000} = 12.50 \]

So, the average fixed cost for this example is $12.50 per unit.