Fixed Cost Per Unit Calculator
Fixed Cost Per Unit Calcultor helps calculating the Fixed Cost Per Unit
What is Fixed Cost?
A fixed cost is an expense or cost that does not change with an increase or decrease in the number of goods or services produced or sold.
Fixed costs are expenses that have to be paid by a company, independent of any business activity.
Fixed costs is one of the two components of the total cost of running a business, the other being variable costs.
Office rent, Insurance, Advertising, Office salaries, Supplies, stationery and postage, Utilities, Legal and Accounting, Travel and Entertainment, Company car expense, Employee benefits, Payroll taxes are all fixed costs.
What is Fixed Cost Per Unit?
Fixed Cost Per Unit is a simple, but important metric to help the firm set prices and find ways to improve your business.
For example, if a firm has a fixed costs of 0, and produce 200 units in that month, it means that, for unit card it makes, it costs {jumi [components/com_jumi/files/calculators/FCPU.php]}.50 in fixed cost.
The more units the firms make, the Fixed Cost Per Unit decreases, and the profits increases.
The Formula of Fixed Cost Per Unit
Fixed Cost Per Unit = Fixed Costs / Number of produced units
Example of Fixed Cost Per Unit
For example, if the total fixed costs is 1,000,000 dollars and the number of produced units is 100,000, the Fixed Cost Per Unit Calcultor is 10
1,000,000 / 100,000
The Meaning is: The firm should charge at least 10 dollars per unit, in order to be able paying the fixed costs.