Q&A for How to Calculate Variable Costs

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How do I calculate both fixed and variable cost while given the total cost and what they produced?

Community Answer

To calculate fixed and variable costs, you will need more information than just the total cost and quantity produced. You will need to know either fixed costs or variable costs incurred during production in order to calculate the other.

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Question

Are electricity and water expenses fixed costs?

Community Answer

No, they are not. They are variable costs, as their use in production vary with the level of output.

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Question

How can I determine volume if the fixed and variable costs and price of item are known?

Community Answer

In order to calculate volume produced, you will need enough information. If you know the total variable cost (TVC) and unit variable cost (UVC), you can divide them(TVC/UVC) to get the volume produced. The same can be done with total and unit fixed costs.

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Question

How do I calculate variable cost for a single product sales, when all im given is the selling price per unit, sales, direct materials, direct labor and overheads?

Community Answer

Start by dividing the sales by the price per unit to get the number of units produced. Then, add up direct materials and direct labor to get total variable cost. Divide total variable cost by the number of units produced to get average variable cost.

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Question

I have an equation of total costs and the output produced. How can I calculate total fixed costs and total variable costs?

Community Answer

You would use tc=a+bx, where a is the fixed cost, b is the variable cost and x is the level of activities.

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