total cost at high activity level – total cost at low activity level Variable cost per unit= total units at high activity level – total units at low activity level Fixed cost = (total cost at high activity level) – (total units at high activity level × variable cost per unit) 3. F...
Variable Cost Per Unit Formula The average variable cost, or “variable cost per unit,” equals the total variable costs incurred by a company divided by the total output (i.e. the number of units produced). Average Variable Cost Per Unit = Total Variable Costs ÷ Output Calculating the ...
$3,000 (total variable cost) / 60 (total output of units produced) = $50 (average variable cost per unit) In this example, the average variable cost formula simply works backward to arrive at our original cost per unit. Where average variable cost is most useful, however, is when you’...
To use avariable cost calculator, we apply the following formula- Variable costs = Cost per unit x Total number of units After calculating variable expenses, it is applied to conduct abreak-even analysisof a firm. Break-even analysis = Fixed costs/Selling price per unit – Variable cost per...
What is a variable cost example? A variable cost example is anything directly related and consumed during production. Raw materials, labor, and supplies are common variable cost examples. What is the formula of variable cost per unit? The variable cost per unit formula is the same as the aver...
You are to calculate the total variable cost of product X. Solution Here we are given all the variable costs per unit, and therefore we can use the below formula to calculate the total variable cost per unit. Direct Labor Per Unit: $10.20 Direct Material Cost Per Unit: $11.13 Variable ...
Mathematically, the revenue (R) should be equal to fixed cost (FC) plus variable cost (VC) in order to determine the precise break-even quantity. The difference between the sales price per unit and the variable cost per unit is called the contribution margin. The higher the margin, the le...
Variable Cost Formula To find the average variable cost, first calculate the variable cost for all units then divide the sum by the number of units produced: Total Variable Cost = Total Quantity of Output x Variable Cost Per Unit of Output ...
The formula to calculate variable costs is: Total variable costs = production output x variable cost per unit For example, the total variable cost for 10,000 units produced at a per-unit cost of $2.57 would be $25,700. (This cost per unit is often referred to as average variable cost,...
While online calculators can be a big help when you’re just starting a business, it’s important to understand how to calculate variable costs and how the formula works. When you understand the inner workings of this formula, you can use it to figure out the variable cost per unit, as ...