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What is Unit Cost?

 , updated on December 25, 2016
Unit cost is the expenditure required to produce, distribute and sell one unit of a product or service including both overhead such as advertising and variable costs such as material and labor.
It is common to measure unit cost at the margin, meaning the cost to produce one additional unit. In many cases, unit costs drop as a company benefits from economies of scale but eventually increase as new facilities such as factories are required to produce additional units.
Overview: Unit Cost
TypeBusiness Cost
DefinitionThe cost to produce one unit of a product or service including overhead and variable costs.
Related ConceptsCost Of Revenue
Total Cost Of Ownership

Business Costs

This is the complete list of articles we have written about business costs.
Activity Cost
Business Equipment
Capex
Capital Improvement
Cost Of Living
Expenses
CAC
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Operating Cost
Operating Expenses
Opex
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Shrinkage
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Opportunity Cost
Variable Costs
Prospective Cost
Switching Costs
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