Average Fixed Cost Calculation Steps:

• Identify total fixed costs (TFC) from the problem data, e.g., $50,000.
• Note the output quantity as 10,000 units.
• Apply the formula: Average Fixed Cost (AFC) = TFC / Quantity.
• Compute: $50,000 / 10,000 =$5.

Why A is correct:

• AFC equals total fixed costs divided by units produced, yielding $5 per unit.

Why the others are wrong:

• B confuses AFC with a different cost metric, like average variable cost.
• C likely misapplies total costs instead of fixed costs only.
• D uses incorrect total fixed costs or wrong quantity in the formula.

Final answer: A