example of formula for calculating project unit varialbe cost for 1 month,

Question

rent 900, MOH variable 200, MOH fixed 200, direct materials 1600, labor 160, units produced 100 in the relevant range

 

 

 

I really need to know the formula and how to set up the problem.

Answer 1

The normal formula is  Price*X = Fixed Cost + Variable Cost*X + Profit

 

or Revenue = FC + VC + Profit

 

If you are looking for the break-even point, then Profit = 0

 

Here we have no price information and you only want the variable cost per unit. The cost line is

 

FC + VC*units

 

FC = $900 + 200 = $1,100

 

VC = $200 + 1,600 + 160 = $1,960

 

 

With 100 units produced, Variable cost per unit is $1,960 / 100 = $19.60/unit