Build a linear cost function and find total, average and marginal cost at any output.
Please do not make financial decisions based on these results.
What is the Cost Function Calculator?
Build a linear cost function and find total, average and marginal cost at any output. To use the Cost Function Calculator, enter fixed cost, variable cost per unit, quantity; it returns total cost c(q), average cost, marginal cost, variable cost total, and shows them instantly as you type.
Where the Cost Function Calculator fits
Build a linear cost function and find total, average and marginal cost at any output. The main figure it returns is the Total cost C(q), worked out from the values you enter.
It belongs with the other business planning tools. If you are comparing options or checking a result from another angle, try the Average Fixed Cost Calculator, Cost of Doing Business Calculator or the Labor Cost Calculator.
How to use the Cost Function Calculator
- Enter your numbers. The inputs are Fixed cost ($), Variable cost per unit ($), Quantity (q). Use figures from the same period (same month, quarter or year) for every field. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Total cost C(q), and the cards below show Average cost, Marginal cost, Variable cost total. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Cost Function Calculator using the default values shown in the calculator above:
Inputs
| Fixed cost ($) | 5,000 |
|---|---|
| Variable cost per unit ($) | 12 |
| Quantity (q) | 800 |
Results
| Total cost C(q) | $14,600.00 |
|---|---|
| Average cost | $18.25 |
| Marginal cost | $12.00 |
| Variable cost total | $9,600.00 |
With these inputs the calculator returns Total cost C(q): $14,600.00. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Fixed cost ($) from 5,000 to 6,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Total cost C(q) | $14,600.00 | $15,600.00 | +6.8% |
| Average cost | $18.25 | $19.50 | +6.8% |
| Marginal cost | $12.00 | $12.00 | 0% |
| Variable cost total | $9,600.00 | $9,600.00 | 0% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Cost Function Calculator reports Total cost C(q), average cost, marginal cost and variable cost total. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
What is a cost function?
It is an equation that gives the total cost of producing any quantity of output.
Are the results forecasts?
No. They apply the formula shown to the numbers you enter, so the output is only as realistic as your assumptions.
What is the most important number for a new business?
Cash runway. A profitable plan still fails if cash runs out first, so check burn rate and break-even together.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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