Cost per unit calculator
Unit cost is not always total cost divided by purchased units. Waste, returns, expired goods, and damaged units increase the real cost of each sellable unit. This calculator separates the cost per purchased unit from the cost per usable unit and, with your target margin, suggests a sale price per unit.
With 1,000 total cost, 100 units purchased, and 10% waste:
- Usable units: 90
- Cost per purchased unit: 10.00
- Real cost per usable unit: 11.11
- Suggested price at 40% margin: 18.52 (7.41 profit per unit)
Formulas
Usable units = Units purchased × (1 − Waste rate)
Real unit cost = Total cost / Usable units
Suggested price = Real unit cost / (1 − Target margin)
Step-by-step example (calculator defaults)
- Total lot cost = 1,000 for 100 units (10 per purchased unit).
- Expected waste = 10% → usable units = 100 × 0.90 = 90.
- Real unit cost = 1,000 / 90 = 11.11 (not 10: waste costs money even when unsold).
- Target margin = 40% → suggested price = 11.11 / (1 − 0.40) = 18.52.
- Profit per unit = 18.52 − 11.11 = 7.41; across the sellable lot, 666.67 of potential profit.
Scenario table (same engine logic)
| Total cost | Units | Waste | Margin | Usable | Real cost | Suggested price |
|---|---|---|---|---|---|---|
| 1,000 | 100 | 10% | 40% | 90 | 11.11 | 18.52 |
| 1,000 | 100 | 10% | 30% | 90 | 11.11 | 15.87 |
| 600 | 50 | 5% | 40% | 48 | 12.63 | 21.05 |
| 2,000 | 200 | 15% | 35% | 170 | 11.76 | 18.10 |
| 800 | 80 | 0% | 40% | 80 | 10.00 | 16.67 |
Interpreting the result
- Waste still costs money: include it for food, cosmetics, packaging, apparel, imports, perishable inventory, and products with frequent returns.
- Compare suppliers on real cost, not purchase cost: a cheaper lot with more waste can be more expensive per sellable unit. The table shows how the number moves with different waste rates.
- The suggested price uses margin on sale, not markup on cost: at 40% margin, cost represents 60% of the price. If you want 40% over cost, the number would differ (see profit margin).
- Common mistakes: forgetting expired or damaged units, pricing from the purchased-unit cost, and not updating waste when the supplier or season changes.
This calculator works with the base unit price, without VAT or other taxes. The waste estimate should come from your real sales and returns history, not a fixed industry percentage. Educational tool: adjust values to your data and verify the current tax rate in your country.
Frequently asked questions
Divide total cost by usable units, not purchased units: 1,000 / 90 = 11.11. Waste increases the real cost per sellable unit.
Damaged, expired, or returned units still belong to the total cost even when they cannot be sold. With 10% waste, the real cost rises from 10 to 11.11.
It is the total cost divided only by the units you can actually sell or use, after subtracting waste, breakage, expired goods, and returns.
No. This calculator estimates the base unit price. For the final taxed price, use the sale price with margin and VAT calculator.
Divide the real unit cost by 1 minus the target margin: 11.11 / (1 − 0.40) = 18.52. That prices the item using margin on sale price.
Related calculators
- Profit margin: margin and markup over cost
- Sale price with margin and VAT: final price including taxes and fees
- Reorder point: when to buy again without running out of stock
- Break-even point: how many units cover your fixed costs
- Monthly budget: keep business fixed costs under control