Unit Product Cost Calculator

Calculate Unit Product Cost







Formula

The formula to calculate the Unit Product Cost is:

\[ C = \frac{DM + DL + O}{U} \]

Where:

What is a Unit Product Cost?

A unit product cost is defined as the total cost per unit that it takes to produce a good. This includes the direct material costs, direct labor costs, and factory overhead costs, divided by the number of units produced. It is a critical measure for determining the profitability and pricing of products.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ C = \frac{5000 + 3000 + 2000}{1000} = 10 \text{ dollars per unit} \]

The Unit Product Cost is $10 per unit.

Example Calculation 2

Let's assume the following values:

Using the formula:

\[ C = \frac{8000 + 4000 + 3000}{2000} = 7.50 \text{ dollars per unit} \]

The Unit Product Cost is $7.50 per unit.