Business costs

Product unit cost calculator

Enter costs for one batch. Packaging is charged only to saleable units. Use allocated production overhead once, and use a consistent VAT basis.

User-selected dates and amounts; no tax-year ratesUnited Kingdom; arithmetic is the same in all four nationsReviewed 15 October 2026

Your figures

Example values shown

Replace the example with your details, then calculate.

One line per item: description, quantity, price per unit. Use a decimal point and no thousands separators. Enter every amount in GBP. Maximum 200 lines.
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units
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BEHIND THE NUMBERS

How this calculation works

Good units = produced units − rejects. Batch cost = materials + labour hours × hourly cost + allocated overhead + packaging × good units − scrap recovery. Unit cost = batch cost ÷ good units.

Worked example

Materials £70 + labour £30 + overhead £20 + packaging £10 = £130. Ten good units cost £13 each.

Example result: £13.00

Count saleable output

Rejected units reduce the denominator. Their costs remain in the batch unless recovered through the scrap field, so waste increases the cost of each saleable unit.

Avoid double-counting overhead

If machine time already contains allocated factory overhead, do not add that same overhead again. Keep marketing and sales expenditure separate from production costing.

Assumptions and rounding

  • All units share the same cost structure.
  • The batch is complete; no opening or closing work in progress is valued. Unit costs are retained beyond pennies for comparison.

Questions about this calculator

Can I divide by all units started?

The useful unit cost here is per good unit, so rejected units are excluded from the denominator.

Where does my overhead figure come from?

Use the cost allocated to this batch from your own overhead policy. The overhead-rate calculator can help with a consistent activity basis.