This will depend on each unique business, but there is a simple formula. Let’s walk through an example: Assume that a business’s monthly spending to produce 100 units of a specialty electronic includes $1,000 on electricity, $5,000 on factory rent, $3,000 on labour, and $4,000 on raw materials. Here is the formula broken down:
Cost per unit = (Electricity + Rent + Labor + Raw materials) / Number of units
Cost per unit = ($1,000 + $5,000 + $3,000 + $4,000) / 100
Cost per unit = $13,000 / 100 = $130