You run a small business producing picture frames. This month your total cost is $10,000, your variable cost is $5,000, and your output is 5,000 picture frames. Given this information, your: It follows thatA. average variable cost is $2. B. average total cost is $3. C. average total cost is $1.D. average fixed cost is $1. Fixed cost in this case is the difference between total and variable cost, which is $10,000 - $5,000, or $5,000. Dividing this by output yields an average fixed cost of $5,000/5,000 or $1.