Unit Cost - Definition

The cost associated with a single unit of measure underlying a resource, Activity, product or service. It is calculated by dividing the total cost by the measured Volume. Unit cost measurement must be used with caution as it may not always be practical or relevant in all aspects of Cost Management. When purchasing more than a single unit, the total cost will increase with the number of units, but it is common for the unit cost to decrease as quantity is increased (bulk purchasing), as there are discounts etc. This reduction in Long run unit costs which arise from an increase in production/purchasing is due to the fixed costs being Spread out over more products and is called economies of scale.



Terms near "Unit Cost "

Unit Labor Costs
Unit of Driver Measure
University of Michigan Consumer Sentiment Index
Unrealized Profit And Loss
Uptick
Uptick Rule
US Dollar Index (USDX)
US Prime Rate
US Treasury
USD
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