Average Fixed Cost (AFC) Calculator
Spread total fixed cost across output to get the average fixed cost per unit (AFC).
Input Data
Results
At a glance:AFC = total fixed cost / quantity. Fixed costs (rent, insurance, depreciation, fixed salaries) do not vary with output, so the more units produced, the lower the per-unit fixed cost — the source of economies of scale. AFC is only part of unit cost; add AVC for the full picture (ATC = AFC + AVC).
Formula
AFC = total fixed cost / quantity.
ATC = AFC + AVC (average total cost = average fixed cost + average variable cost).
How to Use
- Enter the total fixed cost (unchanged by output).
- Enter the output quantity.
- View the average fixed cost per unit.
FAQ
Why does higher output lower AFC?
Because the fixed-cost total stays the same but is spread over more units, so per-unit fixed cost keeps falling — economies of scale. At low output each unit bears a heavy fixed cost, stressing cost structure and pricing.
Is AFC the unit cost?
No. Unit total cost = AFC + AVC. This calculator covers fixed cost only; add per-unit variable cost (materials, packaging, piece wages) for the full unit cost before pricing and profit decisions.
What counts as fixed cost?
Costs paid no matter how much you sell — rent, licence fees, insurance, fixed salaries, equipment depreciation, loan interest. They stay constant within a capacity range; expanding capacity (e.g. renting another shop) steps fixed cost up to a new level.
How do AFC, AVC and ATC relate?
AFC is fixed cost per unit (falls with output); AVC is variable cost per unit (usually U-shaped); ATC = AFC + AVC is the full average unit cost. Because AFC keeps falling, ATC is pulled down at low output and pushed up by AVC at high output, so ATC is also U-shaped. Price off ATC plus target profit as the long-run floor, not AFC or AVC alone.
Why does the AFC curve never hit zero?
Mathematically AFC = fixed cost / quantity, so it approaches but never reaches zero (fixed cost stays positive). Also the decline is not perfectly smooth: fixed cost is constant only within a 'relevant range'; once output exceeds capacity and you expand (new premises, more managers), fixed cost steps up and AFC rebounds before falling again. So the real AFC curve is a series of downward steps, not one smooth line.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.