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Which in turn will calculate the Variable Cost Per Unit or in the other words, the Average Variable Cost. Steps Now select the cell E19 and enter the following formula: E18/E19 Doing this will divide the total Variable Cost by the Total Amount of Units Produced. If you are a sales manager, it might be your responsibility to keep sales numbers at a certain level. We will calculate the Variable Cost per unit as we got all the necessary parameters. Watching this profit, or net operating income, over time is a useful tool to assess the health of the company. As a manager, it may be your responsibility to monitor costs or selling prices to insure that a profit is being made on sales. So even though the selling price of the widget has not changed, the profit goes down. $500 −$200 − $400= −$100, so Monte Corporation lost money when they sold only 50 units.Now finally, what if Monte Corporation only sold 50 units?.Known as U1, U2, and U4 through U6 (U3 is the official unemployment rate), these alternative measures of labor underutilization provide insight into a broad range of problems workers encounter in today’s labor market. But what if Monte Corporation only sold 100 units? Note: The Bureau of Labor Statistics (BLS) publishes a range of indicators that point to the extent to which labor resources are being utilized.What would be Monte Corporation’s profit if they sold 200 units? Fixed expenses for the company are $400 per month. Let’s assume that Monte Corporation sells their widgets for $10 each.Now that we have our equations and definitions, let’s look at some examples of calculating net operating income utilizing the profit equation: This number is useful, as it is pretty consistent from month to month and year to year in identifying growth in your business. Ordinary expenses of a business include the variable costs used in creating each product, along with all of the general fixed expenses. Net operating income is defined as sales less all ordinary expenses of a business, before interest and taxes. It wouldn’t make sense to sell your products for less than it costs you to produce them, yet some companies unwittingly do this, simply because they haven’t calculated their profit by using the profit equation. Profit is important to every single business. Calculate net operating income using the profit equation.