Average Variable Cost Calculator

✖Total Variable Cost refers to the cost which varies when the output varies or changes.ⓘ Total Variable Cost [TVC]			+10% -10%
✖The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order.ⓘ Quantity of Each Order [Q]			+10% -10%

✖Average Variable Cost is a metric used in economics to represent the average cost incurred by a firm to produce one unit of output, taking into account only the variable costs.ⓘ Average Variable Cost [AVC]

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Formula

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Average Variable Cost

Formula

`"AVC" = "TVC"/"Q"`

Example

`"400"="20000"/"50"`

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Average Variable Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Average Variable Cost = Total Variable Cost/Quantity of Each Order
AVC = TVC/Q
This formula uses 3 Variables

Variables Used

Average Variable Cost - Average Variable Cost is a metric used in economics to represent the average cost incurred by a firm to produce one unit of output, taking into account only the variable costs.
Total Variable Cost - Total Variable Cost refers to the cost which varies when the output varies or changes.
Quantity of Each Order - The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order.

STEP 1: Convert Input(s) to Base Unit

Total Variable Cost: 20000 --> No Conversion Required
Quantity of Each Order: 50 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

AVC = TVC/Q --> 20000/50

Evaluating ... ...

AVC = 400

STEP 3: Convert Result to Output's Unit

400 --> No Conversion Required

FINAL ANSWER

400 <-- Average Variable Cost

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

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Average Variable Cost Formula

Average Variable Cost = Total Variable Cost/Quantity of Each Order
AVC = TVC/Q

What do you mean by Average Variable Cost ?

In Economics, the Average Variable Cost is the variable cost per unit. The firms use the average variable cost to determine when to stop the production in the short term. A firm would choose to shut down if the price of its output is below average variable cost at the profit-maximizing level of output (or, more generally if it sells at multiple prices, its average revenue is less than AVC). Producing any output would not generate revenue significant enough to offset the associated variable costs; producing some output would add losses (additional costs in excess of revenues) to the costs inevitably being incurred (the fixed costs). By not producing output, the firm loses only the fixed costs.

How to Calculate Average Variable Cost?

Average Variable Cost calculator uses Average Variable Cost = Total Variable Cost/Quantity of Each Order to calculate the Average Variable Cost, Average Variable Cost is the average of total variable cost per unit of output. Average Variable Cost is denoted by AVC symbol.

How to calculate Average Variable Cost using this online calculator? To use this online calculator for Average Variable Cost, enter Total Variable Cost (TVC) & Quantity of Each Order (Q) and hit the calculate button. Here is how the Average Variable Cost calculation can be explained with given input values -> 400 = 20000/50.

FAQ

What is Average Variable Cost?

Average Variable Cost is the average of total variable cost per unit of output and is represented as AVC = TVC/Q or Average Variable Cost = Total Variable Cost/Quantity of Each Order. Total Variable Cost refers to the cost which varies when the output varies or changes & The Quantity of Each Order refers to the number of units or items that are purchased or acquired in a single transaction or order.

How to calculate Average Variable Cost?

Average Variable Cost is the average of total variable cost per unit of output is calculated using Average Variable Cost = Total Variable Cost/Quantity of Each Order. To calculate Average Variable Cost, you need Total Variable Cost (TVC) & Quantity of Each Order (Q). With our tool, you need to enter the respective value for Total Variable Cost & Quantity of Each Order and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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