Average Fixed Cost (AFC) is the fixed costs incurred by a company that remain constant irrespective of output on a per-unit basis.
It shows that average fixed cost can also be defined as the difference between average total cost and average variable cost:AFC ATC AVCExample and GraphSucrose Farms is engaged in cultivation of sugar cane. They have hired 3 workers on a one-year contract which is non-cancelable. They pay ...
As the number of units produced becomes larger, the average fixed costs per unit becomes smaller,all else equal. Similarly if a business produces fewer units, the average cost would increase per unit. Let’s look at an example. Example ...
Average Fixed Cost (AFC) = total fixed costs / quantity Average fixed costs may also be computed by subtracting the average variable costs from the average total cost. Example Consider a car manufacturing company that produces 100 trucks every single month. Assuming that the company incurs two ty...
1Averagefixedcost（AFC）：1平均固定成本（AFC）
Fixed costs are related to production and do not typically change. For example, thesalaryof a plantmanagergenerally remains the same whether the firm produces 200 or 800 units. The manufacturer still has to figure the plant manager's salary into its production costs. Variable costs, such as th...
Fixed costs stay the same, regardless of the output volume. Let's take a look at the annual fixed costs of the Hasty Hare Corporation, a manufacturer of sneakers for rabbits, as an example: Salaries of full-time supervisory employees - $137,000 Rent on leases - $65,000 Mortgage payments...
Add example Translations of "average fixed cost" into Chinese in sentences, translation memory Declension Stem Match words all exact any ▪ “It costs about $7000 to fix up an average contract killing in Russia [in 1995] . . . ■“[1995年,]在俄罗斯雇用杀手行凶,平均花七千美元左右...
Example #1 Let us take the simple example of the manufacturing plant of ASF Inc., where the total fixed cost of production during the year was $100,000, and the variable cost of production was $20 per unit. Next, determine the average cost of production if the company manufactured 20,000...
Understanding the importance of average cost will also help you understand how it works for long periods of time. For example, cost fluctuates depending on seasonal demand and production efficiency. When you calculate the average cost,it normalizes or levels out the cost per unit of production ov...