Variable Cost Per Unit Calculator

Enter the total variable cost of labor, total variable cost of materials and production volume. Then click the ‘calculate’ button to see the variable cost per unit.

What is variable cost per unit? The variable cost per unit is the cost per one unit dependent on the total variable expenses and the number of units produced. In other words, the variable cost per unit is just the total variable expenses (labor and material) divided by the number of units produced.

How to calculate variable cost per unit? First, you need to know the total variable cost of labor. Second, you need to know the total variable cost of materials. And last, you need to know the production volume. Then you need to add the total variable cost of labor and total variable cost of materials and divide the obtained result by the production volume.

See the variable cost per unit formula below.

Variable cost per unit = (Total variable cost of labor + Total variable cost of materials) / Production volume

Where,

• Variable cost per unit is the variable cost per one unit produced,

• Total variable cost of labor is the cost you paid per labor in a particular period,

• Total variable cost of materials is the cost you paid per materials in a particular period,

• Production volume is the number of units produced in this period.

Variable cost per unit example

So, how can you use the variable cost per unit formula in practice? See the example down below to learn how to calculate variable cost per unit.

For instance, you want to know what the variable cost per unit was in the last year. Your total variable cost of labor for the previous year was 120 000$. Your total variable cost of material for the previous year was 60 000$. And your production volume for the previous year was 200 000 units. So make it in the way which you see in the formula. It’s explained below.

Solution:

You need to add the total variable cost of labor and total variable cost of materials. Then divide the obtained result by the production volume. The formula look as follows:

Variable cost per unit = (Total variable cost of labor + Total variable cost of materials) / Production volume

So now put the data into this formula. It should look like this:

Variable cost per unit = (120 000 + 60 000) / 200 000

Make the calculations. The numbers are quite huge, so you can use a calculator if you need. Then you will see the result, that is the variable cost per unit.

0.9 = (120 000 + 60 000) / 200 000

So this is how to calculate variable cost per unit. The variable cost per unit is 0.9$.

Download this example

Variable cost per unit example in Excel

Do you know you can use Excel as a variable cost per unit calculator? You just need a variable cost per unit Excel formula to make it. See down below how to use Excel to calculate variable cost per unit.

For example, your total variable cost of labor is 187 650$, your total variable cost of materials is 68 850$ and production volume is 250 000 units.

Your problem is that you don’t know what the variable cost per unit is.

Your solution is using an Excel formula for calculating variable cost per unit.

Variable cost per unit = (Total variable cost of labor + Total variable cost of materials) / Production volume

So put the data into the formula. It will look as follows:

Variable cost per unit = (187 650 + 68 850) / 250 000

Press the ‘enter’ button on your keyboard to calculate it.

1.026 = (187 650 + 68 850) / 250 000

To get the final variable cost per unit you can round off the result to two decimal places too. Just use “ROUNDUP” or “ROUNDDOWN” functions in Excel to make it.

1.03 ≈ 1.026 = (187 650 + 68 850) / 250 000

Thanks to the simple Excel formula, you know that the variable cost per unit is 1.03$.

Variable cost per unit explanation

To calculate variable cost per unit, follow the steps down below:

1. Step 1: First, determine the total variable cost of labor. It is the price you paid for labor in a particular period.

2. Step 2: Second, determine the total variable cost of materials. It is the price you paid for materials in a particular period.

3. Step 3: Third, determine the production volume. It is the number of units you produced in a particular period.

4. Step 3: Finally, calculate the variable cost per unit. Add the total variable cost of labor (step 1) and total variable cost of materials (step 2). Then divide the obtained result (step 1 + step 2) by the production volume (step 3). Use the variable cost per unit formula given below:

Variable cost per unit = (Total variable cost of labor + Total variable cost of materials) / Production volume

Sources:

https://en.wikipedia.org/wiki/Variable_cost

https://en.wikipedia.org/wiki/Unit_price