COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is the correct formula to calculate a firm’s variable cost per unit?
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Total costs / output
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Total variable costs / output
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Output / total costs
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Output / total variable costs
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Explanation:
Detailed explanation-1: -Variable Cost Formula. 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: -The first method works by using this simple formula: Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
There is 1 question to complete.