![]() If the total cost of transporting the team to the game cost $300, the coach would need to work out how much each of the 30 team members must pay to cover this cost. Unit costs in business is like calculating how much each person on the sports team must pay in order to hire a bus to transport them to a game. Unit cost = (Total fixed costs + Total variable costs) ÷ Total units produced So the unit cost of 10,000 units produced costing $20,000 in total fixed costs and $30,000 in total variable costs would be: A good example of a variable costs is direct materials (materials used in the production of the product) if units of production doubles, then the variable costs will double as well.
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