Enter the direct materials cost, direct labor costs, and the factory overhead, and total units produced to calculate the unit product cost.

## Unit Product Cost Formula

The following equation is used to calculate a unit product cost.

C = ( DM + DL + O ) / U

- Where C is the unit product cost
- DM is the direct material costs
- DL is the direct labor costs
- O is the factory overhead costs
- U is the total units produced

## Unit Product Cost Definition

A unit product cost is defined as the total cost per unit that it takes to produce a good.

## Unit Product Cost Example

How to calculate a unit product cost?

**First, determine the direct material costs.**These are costs of material used to produce the lot of goods.

**Next, determine the direct labor costs.**Calculate the direct labor costs.

**Next, determine the factory overhead.**Calculate the factory overhead that was used to make the product.

**Next, determine the total number of units produce.**Measure the total number of units.

**Finally, calculate the unit product cost.**Use the equation above to calculate the unit product cost.

## FAQ

**What is a unit product cost?**

A unit product cost is the total cost per unit that it takes to manufacture a product.