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