Warehouse & Logistics Encyclopedia
Your comprehensive guide to warehouse, logistics, and supply chain terminology. Explore over 100+ industry terms with detailed explanations and practical insights.
Unit Cost
The total expense incurred to produce or procure a single unit of product.
Definition
Unit cost includes manufacturing, labor, materials, overhead, and logistics costs divided by the total number of units produced or purchased.
Overview
Calculating unit cost is essential for pricing, profitability analysis, and inventory valuation.
Role
The total expense incurred to produce or procure a single unit of product.
Focus
Calculating unit cost is essential for pricing, profitability analysis, and inventory valuation.
Example
A company producing 1,000 widgets incurs $50,000 in total costs, resulting in a unit cost of $50 per widget.
FAQs
Q: Can you give an example of Unit Cost?
A: A company producing 1,000 widgets incurs $50,000 in total costs, resulting in a unit cost of $50 per widget.