how to calculate cost per unit in cost sheet
(Total fixed costs + Total variable costs) / Total units produced. The cost per unit should decline as the number of units produced increases, primarily because the total fixed costs will be spread over a larger number of units (subject to the step costing issue noted above).Thus, the cost per unit is not constant.For example, ABC Company has total variable costs of $50,000 and total fixed costs of $30,000 in May, which it incurred while producing 10,000 widgets. The cost per unit is: ($30,000 Fixed costs + $50,000 variable costs) / 10,000 units = $8 cost per unit.In the following month, ABC produces 5,000 units at a variable cost of $25,000 and the same fixed cost of $30,000. The cost per unit is:($30,000 Fixed costs + $25,000 variable costs) / 5,000 units = $11/unit.Total fixed costs + Total variable costs) / Total units produced. The cost per unit should decline as the number of units produced increases, primarily because the total fixed costs will be spread over a larger number of units (subject to the step costing issue noted above).