Learn to study your Business Studies curriculum properly.
The fixed cost is the same regardless of the number of units produced.
The variable costs are the costs of producing x number of units.
The break-even point is where value of sales = fixed costs + variable costs.
Variable cost per unit = Total variable cost / total number of units manufactured
Fixed cost / (selling price - Variable cost per unit) --> Fixed cost ----------------------------------------------- (Selling Price - Variable Cost Per Unit)
Easiest way: Total costs per unit - fixed costs per unit = variable cost per unit. Also recatting into accounting.
Total Variable Cost divided by Quantity of Output
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To calculate the average cost in economics, you divide the total cost by the quantity of goods produced. This gives you the cost per unit, which is the average cost.
Carriage is transportation cost. If you are selling the product in your store, you would calculate how much it cost to transport the goods to your store, then factor in the per unit shipping cost. Do a simple COGS (cost of goods sold) calculation. Add the per unit shipping cost to the cost make or buy the product per unit, then add your profit mark-up, say 30%.
Contribution margin per unit is calculated by subtracting the variable cost of the item from the selling price of the item.
Following data is required to calculate break even point: 1 - Sales revenue or sales price per unit 2 - variable cost per unit 3 - fixed cost
Direct cost per unit is that cost of unit incurred to manufacture one unit of product.Formula for direct cost per unit = total direct cost / total number of units.
To calculate the average cost in accounting, you add up the total costs and then divide by the number of units produced or sold. This gives you the average cost per unit.
540,000/(180-126) = 10,000 units ($1,800,000 in Sales)