Average Total Cost (ATC) Calculator

Formula

The formula to calculate the average total cost (ATC) is:

\[ ATC = \frac{FC}{Q} + \frac{VC}{Q} \]

Where:

$ ATC $ is the average total cost
$ FC $ is the total fixed costs
$ VC $ is the total variable costs
$ Q $ is the quantity of goods

What is Average Total Cost?

Average total cost (ATC) is a measure of the sum of the fixed and variable costs per unit or quantity of goods. Fixed costs are expenses that do not change with the level of production, while variable costs vary directly with the level of production.

Example Calculation

Let's assume the following values:

Total Fixed Costs (FC): $5000
Total Variable Costs (VC): $3000
Quantity of Goods (Q): 100

Using the formula to calculate the average total cost:

\[ ATC = \frac{5000}{100} + \frac{3000}{100} = 50 + 30 = 80 \text{ $} \]

The Average Total Cost (ATC) is $80 per unit.