How this calculator works
The entered costs must cover the same batch as the unit count. This average does not identify marginal cost, selling price or profit. Divide by usable output if rejected units are included in the cost pool.
The formula
Average unit cost = (materials + labor + overhead) / units produced.A quick example
Materials of 600, labor of 300 and overhead of 100 across 200 units give a cost of 5.00 per unit.
How to use this calculator
- Choose the settings that match your scenario, using the units shown beside each field.
- Enter material cost, labor cost, allocated overhead, units produced.
- Calculate, then review the method and assumptions alongside the results.
A few common questions
Should I count defective units?
Use the unit count appropriate to your costing goal. Counting only usable output spreads the full cost over items you can sell.
Is cost per unit the right selling price?
No. Pricing also needs to cover other expenses, demand and your target margin.