# Calculate Average Variable Cost using Average Total cost

Find average variable cost of 3,000,000 pairs of shoes

Is the answer $16.00? I got that answer by multipling the ATC ($20.00) by the percent of variable cost (80%)

Athletic Shoe Production

Normal Profit $6.00

Leather costs $2.00

Rubber costs $3.50

Metal costs $ .50

Cotton costs $3.00

Assembly $5.00

Total: $20.00 This is the lowest possible cost for the production of a single pair of shoes.

It is also the Average total cost (ATC) of the profit maximizing or loss minimizing quantity of

shoes: 3,000,000

Plant & Equipment 20% if total assembly cost (not ATC)

Labor 80% of total assembly cost (not ATC)

https://brainmass.com/economics/labour-economics/calculate-average-variable-cost-using-average-total-cost-16789

#### Solution Preview

I don't think this answer is right.

<br>Just like posting 16788, the ATC is calculated to be $20

<br>However, we notice that the Fixed ...

$2.19