Calculate cost per unit from total fixed costs, variable costs, and units produced – plus margin, markup, break-even units, and the volume needed to hit a target unit cost.
Related Calculators
Cost Per Unit Formula
The following equation is used to calculate the Cost Per Unit.
- Where CPU is the cost per unit ($/unit)
- TC is the total cost ($)
- TU is the total number of units
To calculate the cost per unit, simply divide the total cost by the total number of units.
What is a Cost Per Unit?
Definition:
A cost per unit is a metric used to describe the cost to produce, purchase, buy, etc one unit of anything.
This could be the cost per unit of a manufacturing plant to make a product or a store’s cost to purchase one unit of product for their shelves. It can be used in any manner of way.
How to Calculate Cost Per Unit?
Example Problem:
The following example outlines the steps and information needed to calculate the cost per unit.
In this example, we are looking at a manufacturing plant that made a certain number of product of a 1 month period.
First, determine the number of units produced. For this problem, the plant was able to produce 30,000 units in this 1 month period.
Next, determine the total cost of those units. This would include material costs, overhead, labor, and other cost. In this case, the total cost is $40,000.00.
Finally, calculate the cost per unit using the equation above:
CPU = TC / TU
CPU = 40,000 / 30,000
CPU =$1.33 /unit
