Traditionally, made by mashing pork and beef, pepperoni is a cured meat product often seasoned with peppers, garlic, fennel, or mustard seeds and stuffed into a casing. And, it has a taste that can only be described, well, by eating it. It adds a slightly spicy and meaty flavor to pizza that is purely its own.
Using the Subtraction Method. 1  1. Calculate the total cost. This is the total amount of money it costs to produce a product, equal to the total fixed cost plus the total variable cost. 2  2. Figure out the average total cost (ATC). The ATC is the total cost, divided by the number of units. 3  3. Determine the total variable cost amount.
To continue the example above under the average cost method, a company would assign an average cost of $19.50 -- the sum of 20 and 19 divided by 2 -- to all 20 widgets sold.