average cost per unit

average cost per unit The average cost per unit is a key metric for businesses to determine the cost of producing or acquiring a single unit of a product. This calculation includes the cost of raw materials, labor, manufacturing, and overhead. By understanding the average cost per unit, businesses can set competitive prices, calculate profit margins, and manage their inventory more effectively. It’s essential for businesses to regularly evaluate their unit costs to ensure profitability and to adjust pricing strategies when necessary.