Enter the total number of units and the total cost into the calculator to determine the cost per unit.

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## Cost Per Unit Formula

The following equation is used to calculate the Cost Per Unit.

CPU = TC / TU

- 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