Image: Â© Briangotts. Satellite view is showing Valletta, the capital city of Malta. Valletta is located in the central-eastern portion of the island of Malta at the Mediterranean coast.The city is colloquially known as Il-Belt (The City) in Maltese and is the island's principal cultural center.mage: Â© Briangotts. Satellite view is showing Valletta, the capital city of Malta. Valletta is located in the central-eastern portion of the island of Malta at the Mediterranean coast.
Subtract the average variable cost from the average total cost. The answer will be the average fixed cost. In the example, the average variable cost of $1.50 per unit would be subtracted from the average total cost of $3.50 per unit in order to reach an average fixed cost amount of $2 per unit. Note that this matches the average fixed cost calculated in method 1.
Determine the company's total fixed costs, desired level of production and variable cost per unit. For example, a company has fixed costs of $5,000. Fixed costs for the company include rent and employee salaries. The company has a variable cost per unit of $1.50.t also helps the company plan its future production. To calculate break-even price, the company needs to know its total fixed costs, the volume of production and the variable costs per unit. The total fixed costs are costs that do not change with the level of production.