per unit cost formula

per unit cost formula The per unit cost formula is used to determine the cost of producing a single unit of a product. It is calculated by dividing the total production cost by the number of units produced. The formula is: Per Unit Cost = Total Production Costs / Total Units Produced. This metric is critical for businesses to understand their cost structure, set prices, and maintain profitability. It helps businesses assess the efficiency of their operations and make adjustments if necessary to reduce costs.