Variable Costing Calculation - Example #1 Let us assume that XYZ Limited is a company that manufactures clothes for people of the elite class living in the modern city. The managerial accountant provides the following data, which has been vetted by the financial director of the company, that: Raw material per unit of cloth = $10 Labor cost per unit of cloth = $6 Fixed cost in total for the period = $500,000 (redundant) Salary for Sales team for the period = $250,000 (redundant) Other direct costs (variable overhead) per unit of cloth = $4 Therefore, Variable costing formula= Raw material per unit of cloth + Labour cost per unit of cloth + Other direct costs (variable overhead) per unit of cloth Variable costing formula= $10 + $6 + $4 Variable costing formula= $20 per unit of cloth