product unit cost formula

product unit cost formula The product unit cost formula is used by businesses to calculate the cost of producing a single unit of a product. The formula is typically expressed as: (Total Fixed Costs + Total Variable Costs) / Total Units Produced. Fixed costs include expenses that do not change with production volume, such as rent and equipment, while variable costs are those that fluctuate with production, such as raw materials and labor. Knowing the unit cost is essential for pricing products competitively and ensuring profitability.