Enter the total variable expense ($) and the total number of units into the Calculator. The calculator will evaluate the Variable Expense Per Unit.
Variable Expense Per Unit Formula
VEU = VE / U
Variables:
- VEU is the Variable Expense Per Unit ($/unit)
- VE is the total variable expense ($)
- U is the total number of units
To calculate Variable Expense Per Unit, divide the total variable expenses by the number of units.
How to Calculate Variable Expenses Per Unit?
The following steps outline how to calculate the Variable Expense Per Unit.
- First, determine the total variable expense ($).
- Next, determine the total number of units.
- Next, gather the formula from above = VEU = VE / U.
- Finally, calculate the Variable Expense Per Unit.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
total variable expense ($) = 500
total number of units = 100
FAQs
What is a variable expense?
Variable expenses are costs that change in proportion to the activity or volume of a business. Unlike fixed expenses, which remain constant regardless of activity levels, variable expenses fluctuate with production output or sales volume.
How can understanding variable expenses per unit benefit a business?
Understanding variable expenses per unit helps businesses in pricing their products, managing costs, and forecasting profits. By knowing the cost per unit, companies can set prices that cover costs and generate desired profit margins.
Can variable expenses per unit change over time?
Yes, variable expenses per unit can change due to factors such as changes in raw material costs, labor rates, or production efficiency. Businesses need to regularly review and adjust their calculations to reflect current costs.
