Fixed and variable costs are key tools in every venture

The fixed costs of our business are those costs that we must pay for. Fixed costs have the particularity of remaining stable over a period of time, regardless of how much we produce.

It is the monetary value of producing a good or service. It is usually calculated as the cost of producing all goods divided by the number of goods produced. It is essential in business to know the unit cost of what it costs to produce a good, because this will have a direct impact on the price of the final product and, probably, on the customer's decision to purchase it.

Unit cost is commonly derived when a company produces a large quantity of identical products. This information is then compared to budgeted or standard cost information to see if the organization is producing goods profitably.

Unit cost is a crucial cost measure in a company's operational analysis. Identifying and analyzing unit costs is a quick way to verify whether a company is producing a product efficiently.

Knowing unit cost provides a dynamic overview of the relationship between revenues, costs and profits, and allows us to better plan and monitor business management.