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Manufacturing Tool — Cost per Unit Calculator
Production Cost Calculator — Know Your Cost per Unit Before Pricing
Calculate total production cost per unit including raw materials, labour, overheads, packaging, and wastage. Essential for food manufacturers, garment producers, and FMCG brands.
Total Batch Cost = Raw Material + Labour + Overhead + Packaging
Good Units = Total Units × (1 − Wastage Rate ÷ 100)
Production Cost per Unit = Total Batch Cost ÷ Good Units
Min. Selling Price = Cost per Unit ÷ (1 − Target Margin %)
Worked Example
Scenario: A sweet shop produces 100 kg of gulab jamun per batch.
Compare cost of in-house production vs buying from vendor
Calculate impact of raw material price changes on profitability
Budget raw material purchases for a production run
Identify which products are most cost-efficient to produce
Justify minimum order quantities to buyers and distributors
Frequently Asked Questions
Production cost is the total cost of manufacturing one unit of a product, including raw material cost, direct labour, manufacturing overheads, and packaging.
Set Selling Price = Production Cost per Unit ÷ (1 − Desired Margin %). For example, if cost is ₹100 and you want 40% margin, Selling Price = ₹100 ÷ 0.60 = ₹167.
Overheads include factory rent, electricity, machine depreciation, quality control costs, and indirect labour (supervisors, cleaners). They are typically allocated per unit based on production volume.
Common methods: improve yield to reduce raw material waste, negotiate better raw material prices, increase batch size to spread fixed overheads, and reduce machine downtime through preventive maintenance.
No. If you are a registered GST taxpayer, you can claim Input Tax Credit on raw material GST. Your production cost should use the base price of inputs, not the GST-inclusive price.
