How To Find Cost Per Unit
Cost per unit is the cos t per unit of a product, item or service. It is very important to know that how much cost you charge for each unit cost. If the cost per unit of 5 tables is Rs. 100 (Total Cost = 500) and you sell all of these 5 tables at Rs 120 (5 X 120 = 600), you will get a profit of Rs. 100 (600 - 500). By knowing unit cost of each product, the company can find how much each product cost to the production and efficiently the company uses its resources i.e., maximum output at minimum cost. It is calculated by dividing total costs (both Total of Fixed Costs and Total of Variable Costs) of all units products with total number of unit products. Mathematically, we can show it as follows: Cost Per Unit = Total Costs of All Units Products / Total N umber of Unit Products Or Cost Per Unit = Fixed Costs + Variable Costs / Total Units Produced For Example, if we purchase a set of 5 Chairs, Costing Rs. 100000, then the unit price of a