How to calculate variable costs
Video: How to Calculate Variable Costs? (Quick and Easy) 2024, July
Variables are recognized as costs that directly depend on the volume of the calculated production. Variable costs will depend on the cost of raw materials, and on the cost of electric energy, and on the amount of wages paid.
You will need
- calculator
- notebook and pen
- full list of costs of the enterprise with the specified amount of costs
Instruction manual
1
Add up all the costs of the enterprise, which directly depend on the volume of output. For example, to the variable costs of a trade organization that sells consumer goods, include:
PP - the volume of products purchased from suppliers. It is expressed in rubles. Let the trade organization purchase goods from suppliers in the amount of 158 thousand rubles.
Uh - the cost of electrical energy. Let a trade organization pay 3, 500 rubles a month for electricity.
З - salary of sellers, which depends on the amount of goods sold by them. Let the average payroll in a trade organization be 160 thousand rubles. Thus, the variable costs of a trade organization will be equal to:
VC = PP + EE + 3 = 158 + 3.5 + 160 = 321.5 thousand rubles.
2
Divide the resulting amount of variable costs by the volume of products sold. This indicator can be found in the balance sheet of a trade organization. The volume of goods sold in the above example will be expressed in quantitative terms, that is, by the piece. Suppose that a trade organization was able to sell 10, 500 pieces of goods. Then the variable costs, taking into account the amount of goods sold, are equal to:
VC = 321.5 / 10.5 = 30 rubles per unit of goods sold. Thus, the calculation of variable costs is carried out not only by adding the organization’s costs for the purchase and sale of goods, but also by dividing the amount received per unit of goods. Variable costs with an increase in the sold quantity of goods are reduced, which may indicate the effectiveness of the organization. Depending on the type of company’s activities, variable costs and their types can vary - they are added to the above in the example (costs of raw materials, water, one-time transportation of products and other expenses of the organization).
