ECONOMICS

Detailed explanation-1: -To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Detailed explanation-2: -The formula for total variable cost is: Total Variable Cost = (Total Quantity of Output) x (Variable Cost Per Unit of Output) Cost of materials, utilities, and commissions are all examples of variable costs.

Detailed explanation-3: -Since you have the contribution margin ratio, you must identify the variable cost ratio and use that figure to determine the total sales. To do so, subtract the contribution margin ratio from 100 to determine the variable cost ratio, and then divide the variable cost amount by that percentage.

Detailed explanation-4: -First, add up all of your production costs. Make sure to be clear about which costs are fixed and which ones are variable. Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost.