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Definition of Average total cost

Average total cost Definition from Business & Finance Dictionaries & Glossaries
MONASH Marketing Dictionary
a measure of cost control, calculated by dividing the total cost of the goods produced by the number of units sold.
2004 (c) Copyright & Reprint Courtesy of the Dept. of Marketing, Faculty of Business and Economics, Monash University; edited by Mr. Don Bradmore.
Average total cost Definition from Encyclopedia Dictionaries & Glossaries
English Wikipedia - The Free Encyclopedia
In economics, average cost and/or unit cost is equal to total cost divided by the number of goods produced (the output quantity, Q). It is also equal to the sum of average variable costs (total variable costs divided by Q) plus average fixed costs (total fixed costs divided by Q). Average costs may be dependent on the time period considered (increasing production may be expensive or impossible in the short term, for example). Average costs affect the supply curve and are a fundamental component of supply and demand.

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Under the 'Average Cost Method', it is assumed that the cost of inventory is based on the average cost of the goods available for sale during the period.

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