The formula used in the calculations is:
\[ \text{AVC} = \frac{\text{Variable Costs}}{\text{Total Output}} \]
This calculator computes the average variable cost (AVC) based on the input values of variable costs and total output. Variable costs are those costs that depend on the quantity of goods produced, such as labor, electricity, and raw materials. Total output is the quantity of goods produced over a certain period.
Let's assume the following:
Calculate the average variable cost (AVC):
\[ \text{AVC} = \frac{600,000}{240} = 2,500 \]
Therefore, the average variable cost (AVC) is $2,500 per unit.