how to calculate total variable cost formula?
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To determine the total variable cost the company will spend to produce 100 units of product, the following formula is used: Total output quantity x variable cost of each output unit = total variable cost. For this example, this formula is as follows: 100 x 37 = 3,700.
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Variable costs (aka variable expenses) Falling under the category of cost of goods sold (COGS), your total variable cost is the amount of money you spend to produce and sell your products or services. That includes labor costs (direct labor) and raw materials (direct materials).
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['Fixed cost = Highest activity cost – (Variable cost per unit x Highest activity units)', 'Fixed cost = Lowest activity cost – (Variable cost per unit x Lowest activity units)', 'Cost model = Fixed cost + Variable cost x Unit activity.', 'Fixed cost = $371,225 – ($74.97 x 4,545) = $30,486.35.']
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The total factor cost is the total cost incurred by the business from the use of a given resource. Calculate the change (or difference) in the factor quantity. The factor quantity is the numerical amount of resources used at a given cost. Divide the change in total factor cost by the change in factor quantity.
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['Right-click any value within the target field. ... ', 'Select Value Field Settings. ... ', 'Click the Show Values As tab.', 'Select Running Total In from the drop-down list.', 'In the Base Field list, select the field that you want the running totals to be calculated against. ... ', 'Click OK to apply your change.']
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['Total Job Cost = Direct Materials + Direct Labor + Applied Overhead.', 'Predetermined Overhead Rate = Estimated Overhead / Estimated Activity.', 'Total Job Cost = Direct Materials + Direct Labor + Applied Overhead.']
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['Calculate the weighting factor for each detail row.', 'Sum the weighting factor and the number of units sold.', 'Divide the summed weighting factor by the summed units.']
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['Fixed cost = Highest activity cost – (Variable cost per unit x Highest activity units)', 'Fixed cost = Lowest activity cost – (Variable cost per unit x Lowest activity units)', 'Cost model = Fixed cost + Variable cost x Unit activity.']
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What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero? Hence, ATC = AVC, if TFC is zero.
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Formula to calculate cost price if selling price and profit percentage are given: CP = ( SP * 100 ) / ( 100 + percentage profit). Formula to calculate cost price if selling price and loss percentage are given: CP = ( SP * 100 ) / ( 100 – percentage loss ).
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['Identify costly activities required to complete products. ... ', 'Assign overhead costs to the activities identified in step 1. ... ', 'Identify the cost driver for each activity. ... ', 'Calculate a predetermined overhead rate for each activity. ... ', 'Allocate overhead costs to products.']
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Average total cost (ATC) is calculated by dividing total cost by the total quantity produced. The average total cost curve is typically U-shaped. Average variable cost (AVC) is calculated by dividing variable cost by the quantity produced.
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['Sales - Cost of Goods Sold = Gross Profit.', 'Gross Profit / Sales = Gross Profit Margin.', '(Selling Price - Cost to Produce) / Cost to Produce = Markup Percentage.']
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Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs. The total variable cost is simply the quantity of output multiplied by the variable cost per unit of output.
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Total product costs can be determined by adding together the total direct materials and labor costs as well as the total manufacturing overhead costs. To determine the product cost per unit of product, divide this sum by the number of units manufactured in the period covered by those costs.
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Divide the total manufacturing costs by the number of items produced to arrive at the production cost per unit. Example: Direct materials: Silk: $2500, thread: $100 = $2,600.
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The variable cost ratio is a cost accounting tool that is used to express a company's variable production costs as a percentage of its net sales. The ratio is calculated by dividing the variable costs by the net revenues of the company.