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How to calculate Average unit cost

The Average unit cost formula, with plain worked examples you can check yourself.

Average unit cost = C ÷ U

Worked examples

C = 3000 · U = 250Average unit cost = 12
C = 800 · U = 200Average unit cost = 4
C = 800 · U = 100Average unit cost = 8

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Costs & Break-even.

Related terms

Fixed costsVariable costsCost of goods soldOverheadDepreciationDirect costs

Practice Average unit cost with real numbers

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