How to calculate fixed costs per unit
Fixed costs are manufacturing costs that do not change with the production volume of a company. For example, if your fixed costs are 1, 000 euros per month, then it does not matter if you make 10 units or 1000 units, your fixed costs remain the same. Therefore, fixed costs vary according to each unit . Fixed costs include anything that does not change with production, such as salary or rental expense.Steps to follow:
Determine your total fixed costs in the manufacturing industry. Your ledger should keep this information. If you do not have an accounting system, you can instead look through your receipts and determine what income is produced each month for the same amount. For example, suppose calculating the fixed costs to 1, 000 euros per month.
Determine the number of units produced during the month. Taking the previous example, suppose that you produce 2, 000 units.
Divide your fixed expenses by units produced. Following the example, 1, 000 euros divided by 2, 000 units is equal to $ 0.5 per unit.Tips
- It is not necessary to calculate the fixed costs per unit monthly. This calculation works over a period of time, as long as you look at the fixed costs and the units produced for that period of time, such as a week or a year.