body {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
line-height: 1.6;
color: #333;
max-width: 800px;
margin: 0 auto;
padding: 20px;
}
.calc-container {
background-color: #f8f9fa;
border: 1px solid #e9ecef;
border-radius: 8px;
padding: 30px;
margin-bottom: 40px;
box-shadow: 0 4px 6px rgba(0,0,0,0.05);
}
.calc-header {
text-align: center;
margin-bottom: 25px;
}
.calc-header h2 {
margin: 0;
color: #2c3e50;
}
.form-group {
margin-bottom: 20px;
}
.form-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #495057;
}
.input-wrapper {
position: relative;
}
.input-prefix {
position: absolute;
left: 12px;
top: 50%;
transform: translateY(-50%);
color: #6c757d;
}
.form-control {
width: 100%;
padding: 12px;
padding-left: 30px; /* Space for prefix */
border: 1px solid #ced4da;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.15s ease-in-out;
}
.form-control.no-prefix {
padding-left: 12px;
}
.form-control:focus {
border-color: #4dabf7;
outline: none;
}
.btn-calc {
display: block;
width: 100%;
padding: 14px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: 600;
cursor: pointer;
transition: background-color 0.2s;
}
.btn-calc:hover {
background-color: #0056b3;
}
#result-area {
display: none;
margin-top: 25px;
border-top: 2px solid #dee2e6;
padding-top: 20px;
animation: fadeIn 0.5s;
}
.result-box {
background-color: #ffffff;
border: 1px solid #dee2e6;
border-radius: 6px;
padding: 20px;
text-align: center;
margin-bottom: 20px;
}
.result-label {
font-size: 14px;
color: #6c757d;
text-transform: uppercase;
letter-spacing: 1px;
margin-bottom: 5px;
}
.result-value {
font-size: 32px;
font-weight: 700;
color: #28a745;
}
.scale-table {
width: 100%;
border-collapse: collapse;
font-size: 14px;
background: #fff;
border: 1px solid #dee2e6;
}
.scale-table th, .scale-table td {
padding: 10px;
border-bottom: 1px solid #dee2e6;
text-align: right;
}
.scale-table th:first-child, .scale-table td:first-child {
text-align: left;
}
.scale-table th {
background-color: #e9ecef;
font-weight: 600;
}
@keyframes fadeIn {
from { opacity: 0; transform: translateY(10px); }
to { opacity: 1; transform: translateY(0); }
}
.content-section h2 {
color: #2c3e50;
border-bottom: 2px solid #007bff;
padding-bottom: 10px;
margin-top: 40px;
}
.content-section h3 {
color: #495057;
margin-top: 25px;
}
.formula-box {
background-color: #e8f4fd;
padding: 15px;
border-left: 4px solid #007bff;
margin: 20px 0;
font-family: monospace;
font-size: 18px;
text-align: center;
}
function calculateAFC() {
// 1. Get input values
var tfcInput = document.getElementById('totalFixedCost').value;
var qInput = document.getElementById('quantity').value;
// 2. Validate inputs
if (tfcInput === "" || qInput === "") {
alert("Please fill in both Total Fixed Cost and Quantity fields.");
return;
}
var tfc = parseFloat(tfcInput);
var q = parseFloat(qInput);
if (isNaN(tfc) || tfc < 0) {
alert("Please enter a valid positive number for Total Fixed Cost.");
return;
}
if (isNaN(q) || q <= 0) {
alert("Quantity must be a valid number greater than zero.");
return;
}
// 3. Perform Main Calculation
var afc = tfc / q;
// 4. Update Main Result Display
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById('afcResult').innerHTML = formatter.format(afc);
document.getElementById('result-area').style.display = 'block';
// 5. Generate Scale Projection Table (Economies of Scale)
// Scenarios: Current, Double, Triple, 10x
var scenarios = [
{ label: "Current Production", qty: q },
{ label: "Double Production (2x)", qty: q * 2 },
{ label: "Triple Production (3x)", qty: q * 3 },
{ label: "High Volume (10x)", qty: q * 10 }
];
var tableHtml = "";
for (var i = 0; i < scenarios.length; i++) {
var sQty = scenarios[i].qty;
var sAfc = tfc / sQty;
tableHtml += "
";
}
document.getElementById('scaleTableBody').innerHTML = tableHtml;
}
What is Average Fixed Cost?
Average Fixed Cost (AFC) is a fundamental microeconomic concept used in business accounting and production theory. It represents the fixed cost per unit of output produced. Unlike variable costs, fixed costs do not change with the level of output in the short run (e.g., rent, machinery depreciation, annual salaries).
As production increases, the total fixed cost remains constant, but it is spread over a larger number of units. Consequently, the Average Fixed Cost declines as output rises. This phenomenon is a primary driver of economies of scale.
The AFC Formula
To calculate the Average Fixed Cost, you simply divide the Total Fixed Costs (TFC) by the quantity of output (Q) produced.
AFC = TFC / Q
Where:
- AFC: Average Fixed Cost
- TFC: Total Fixed Cost (Overhead)
- Q: Quantity of Units Produced
Real-World Example
Imagine you run a small coffee roasting facility. Your monthly fixed costs are substantial, regardless of how many beans you roast.
- Warehouse Rent: $2,000
- Equipment Loan Payment: $1,000
- Insurance: $500
- Total Fixed Cost (TFC): $3,500
If you roast 100 lbs of coffee in a month, your AFC is:
$3,500 / 100 = $35.00 per lb (Very expensive overhead per unit).
However, if you ramp up production to 1,000 lbs in a month:
$3,500 / 1,000 = $3.50 per lb.
By increasing output, you have drastically reduced the fixed cost burden on each pound of coffee sold, allowing for higher profit margins or more competitive pricing.
Why is AFC Important for Business Owners?
1. Pricing Strategy
Knowing your AFC helps you set a minimum price floor. To break even, your price must cover the Average Fixed Cost plus the Average Variable Cost (AVC). If you ignore AFC, you might price your product covering only materials and labor, leading to a net loss at the end of the month when rent is due.
2. Decision Making on Scale
The AFC curve is always downward sloping. This calculator demonstrates that increasing production volume is the most effective way to reduce per-unit fixed costs. If your AFC is currently too high to be competitive, the solution is often to find ways to increase sales volume to utilize your fixed assets more efficiently.
3. Shutdown Analysis
In the short run, a business might continue operating even if it is losing money, provided the price covers the variable costs. However, in the long run, the price must cover the Average Total Cost (which includes AFC). If the market price never exceeds your AFC + AVC, the business is not viable.
Frequently Asked Questions
Can Average Fixed Cost ever be zero?
Mathematically, no. As long as there is a positive Total Fixed Cost, dividing it by any finite quantity will result in a positive number. However, as quantity approaches infinity, AFC approaches zero.
Does AFC include raw materials?
No. Raw materials are considered Variable Costs because they increase directly with production (e.g., if you make more tables, you need more wood). AFC only includes costs that stay the same regardless of output (rent, insurance, salaried administrative staff).
What is the difference between AFC and AVC?
AFC (Average Fixed Cost) decreases continuously as production increases. AVC (Average Variable Cost) typically goes down initially due to efficiency but eventually rises due to diminishing returns (e.g., overtime pay, machine overcrowding).