When Super Stuff Corporation produces 5,000 units, total costs equal $150,000 and total variable costs equal $75,000. At this level of output, what is Super Stuff's average fixed cost?
A) $75,000
B) $30
C) $225,000
D) $15

Question

Quizplus · Accepted Answer

Total costs = Fixed costs + Variable costs

$150,000 = Fixed costs + $75,000

Fixed costs = $75,000

Average fixed cost = Fixed costs / Quantity produced

Average fixed cost = $75,000 / 5,000 units

Average fixed cost = $15 per unit

When Super Stuff Corporation Produces 5,000 Units, Total Costs Equal