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MIAMI A
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LSDefine
Simple English definitions for legal terms
unit cost
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A quick definition of unit cost:
Unit Cost: The cost of making one thing. You take the total cost of making a bunch of things and divide it by how many things you made to find the unit cost. For example, if it costs $100 to make 10 toys, then the unit cost of each toy is $10.
A more thorough explanation:
Definition: The cost of a single unit of a product or service; the total manufacturing cost divided by the number of units.
Example: A company produces 1000 units of a product at a total cost of $10,000. The unit cost would be $10,000 divided by 1000 units, which equals $10 per unit.
This example illustrates how unit cost is calculated by dividing the total cost of production by the number of units produced. This calculation helps businesses determine the cost of producing each unit of a product or service, which is important for pricing decisions and profitability analysis.