Enter the direct materials cost, direct labor costs, and the factory overhead, and total units produced to calculate the unit product cost.
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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 the costs of materials used to produce the 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 produced.
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 a total cost per unit that it takes to manufacture a product.