Unit Cost Calculator
Divide manufacturing cost by good units to get the cost of one unit.
What this calculator does
Cost divided by good output. When units started are entered, the cost per unit started and the yield are shown as well.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Total manufacturing cost for the period
- — number value.
- Good units produced
- — number value.
- Units started (optional)
- — Optional component. Leave at 0 to exclude it from the result. Used to show cost per unit started as well..
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Unit cost = Total manufacturing cost ÷ Good units produced
Worked example
$96,000 of cost over 4,800 good units
Cost per good unit, and per unit started when you enter the units started.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: Rice University — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
Formula, source and verification
Total production cost for a period divided by the good output of that period.
The question it answers: What did this job, batch or unit actually cost us to produce?
The formula
Unit cost = Total manufacturing cost ÷ Good units produced
- C — Total manufacturing cost
- (currency). All production cost for the period.
- G — Good units produced
- (count). Saleable output of the period.
- S — Units started
- (count). Optional. Used to show cost per unit started and yield.
Units: Currency; counts.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
Cost divided by good output. When units started are entered, the cost per unit started and the yield are shown as well.
Assumptions built into the result
- Industry: Every cost, rate and standard is the figure the user entered, in the currency they chose; no exchange rate is applied.
- Mathematical: Costs and output cover the same period or the same job.
Figures this calculator will never guess for you
- No industry average, benchmark or target cost is supplied.
- No standard rate, wage or material price is assumed on the user's behalf.
- Optional components are excluded from the result when left at zero.
Limitations
- Arithmetic over the figures entered — it cannot tell whether the costs, standards or allowances behind them are right.
- A target cost, an industry benchmark and the organisation's own standard are different things; only the figures entered are used.
- An average over the period; it does not show how cost varies between units.
Source and version
- Standard or reference
- Managerial accounting — job order and process costing — OpenStax (Rice University) (Principles of Accounting, Volume 2: Managerial Accounting (OpenStax) — job cost is direct materials plus direct labour plus overhead applied at a predetermined rate; unit cost is total production cost divided by the units produced.)
- Published source
- Rice University — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
Related tools
Work out the hourly rate to charge a client so that target margin is met after overhead and non-billable time.
Find the true hourly cost of an employee once benefits, payroll cost and overhead are included.
Size a software application from its data and transaction functions before estimating effort or cost.
Estimate development effort, schedule and average team size for a software project of a known size.
Express cloud spend as a cost per customer, per transaction or per other business unit.
Set the rate used to apply manufacturing overhead to jobs for the coming period.