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

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