True cost to produce one unit. The Cost Per Unit Calculator takes fixed costs for the period, total variable costs for the period, units produced and returns cost per unit plus fixed cost per unit, variable cost per unit, total cost. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Margins tell you where the money goes between revenue and profit. Track each margin over time and against similar businesses; a falling margin while revenue grows is the signal to investigate. Use the worked example below to check the maths against your own figures.
How the Cost Per Unit Calculator works
Fixed cost per unit falls as volume rises, which is why unit cost depends on how much you make. Price above the total cost per unit at realistic volume, not at capacity.
Worked example
With the example values (fixed costs for the period of $50,000, total variable costs for the period of $30,000, units produced of 10000), the cost per unit is $8.00; fixed cost per unit $5.00, variable cost per unit $3.00, total cost $80,000.00. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is cost per unit calculated?
cost per unit = (fixed costs + variable costs) ÷ units produced.
Which figures do I need?
Fixed costs for the period, total variable costs for the period, units produced. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
What is a good margin?
It depends on the industry: grocery and distribution run on low single-digit net margins, software and services on 20% or more. Compare with similar businesses and watch your own trend.
