How do you calculate variable costs per unit?
submitted by Ophelia Payne

whoissallybrown

You start by identifying the total variable costs for a period, and then divide that amount by the total number of units produced or sold during the same period.

Variable Cost per Unit = Total Variable Costs / Total Units Produced.

I_tell_what_hwhat

You find the variable cost per unit by taking the total variable costs, like materials and labor that change with production, and dividing that by how many units you made (or sold). So, if your total variable costs are $10,000 and you made 2,000 units, the variable cost per unit would be $10,000 divided by 2,000, which is $5 per unit.

koala09bear

To figure out the variable cost per unit, you add up all the costs that change with how much you make, like materials and wages, and then divide that total by the number of units you built. That gives you how much it costs to make one unit, whatever unit that may be.