Calculate total fixed cost by subtracting total variable costs from total costs, or find fixed cost per unit, total cost and break-even units.

Subtract total variable costs from total costs.

Optional settings

Variable costs and per-unit inputs

For the same period, total variable cost is VC = TC − FC, and variable cost per unit is V = VC / Q for output Q greater than zero. The Variable costs mode shows both values. If variable cost per unit is already known, select Cost per unit × units in Total fixed costs: FC = TC − V × Q. Use costs within the same relevant output range.

For example, total costs of $20,000 and fixed costs of $8,000 for 500 units give variable costs of $12,000, or $24 per unit. Using $24 × 500 as variable costs returns $8,000 fixed costs.

Fixed Cost Formula

The following equations can be used to calculate total fixed cost and average fixed cost per unit.

FC = TC - VC AFC = FC / Q = (TC - VC) / Q
  • Where FC is the total fixed cost (for the period analyzed)
  • TC is the total cost (for the same period)
  • VC is the total variable cost (for the same period)
  • AFC is the average fixed cost per unit
  • Q is the number of units produced or sold in that period

Fixed Cost Definition

A fixed cost is a cost that does not change with the level of output (within a relevant range) during a given time period—examples include rent, insurance, salaried labor, and equipment leases. Average fixed cost converts that total fixed cost into a per-unit amount: AFC = FC / Q.

Fixed Cost Example

How to calculate fixed cost and average fixed cost?

The following example outlines the steps to calculate total fixed cost and then average fixed cost per unit for a physical product over one month.

The first step is to set a time period to analyze (for example, one month).

Next, determine the total number of units produced during that time. In this case, the total number of units is 500 for the month.

Next, determine total cost and total variable cost for the same period. In this case, total cost is $20,000.00 and total variable cost is $12,000.00.

First, calculate total fixed cost:

FC = TC − VC

FC = $20,000 − $12,000 = $8,000

Then, calculate average fixed cost per unit:

AFC = FC / Q

AFC = $8,000 / 500 = $16.00 per unit

FAQ

What is a fixed cost?

A fixed cost is a cost that stays the same as output changes (within a relevant range) over a given time period—for example, rent or insurance. If you divide total fixed cost by the number of units produced (Q), you get average fixed cost (AFC).