Unit cost is the cost of a single unit produced or served. It is calculated by dividing the total cost by the number of units produced (e.g. portions, plates, drinks).
Formula :
Unit cost = Total cost ÷ Number of units produced
Example:
If a restaurant prepares 100 burgers for a total cost of €500 (e.g.: ingredient), then :
Total cost = 500€.
Unit cost per burger = 500€ ÷ 100 = 5€.
Unit cost helps to set a selling price per portion and optimize profitability.