Variable Expense Per Unit Calculator

Formula

The formula to calculate Variable Expense Per Unit (VEU) is:

\[ \text{VEU} = \frac{\text{VE}}{\text{U}} \]

Where:

$ \text{VEU} $ is the Variable Expense Per Unit ($/unit)
$ \text{VE} $ is the Total Variable Expense ($)
$ \text{U} $ is the Total Number of Units

What is Variable Expense Per Unit?

Variable Expense Per Unit (VEU) is a measure of the cost incurred for each unit produced or sold in a business. It is calculated by dividing the total variable expenses by the total number of units. This metric helps businesses understand how much each unit costs to produce, which is crucial for pricing, budgeting, and financial planning.

Example Calculation

Let's consider an example:

Total Variable Expense (VE): $10,000
Total Number of Units (U): 500

Using the formula to calculate the Variable Expense Per Unit:

\[ \text{VEU} = \frac{10000}{500} = 20 \, \text{\$/unit} \]

This demonstrates that with a total variable expense of $10,000 and 500 units, the variable expense per unit would be $20 per unit.