Enter the total cost and the total number of units sold into the calculator below. The calculator will evaluate and display the average cost per unit sold.

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## Average Cost Formula

The following equation can be used to calculate the average cost of a good.

AC = TC / TU

- Where AC is the average cost
- TC is the total cost
- TU is the total units sold

To calculate average cost, simply divide the total cost by the total number of units sold.

## Average Cost Definition

An average cost is exactly as it sounds. It’s the average cost to produce 1 unit of goods given the total cost and total units produced. Since costs can vary from unit to unit, taking the average cost can be helpful in financial situations.

## Average Cost Example

How to calculate average cost?

**First, determine the total cost.**Measure the total cost of the units sold.

**Next, determine the total units sold.**Determine the total quantity of units sold.

**Finally, calculate the average cost.**Calculate the average cost of units sold using the formula above.

## FAQ

**What is an average cost?**

An average cost is an average amount of cost per unit of a certain quantity of sold goods.