What is Unit Price?

The unit price of an item is the cost for each unit.

How is the Unit Price Used?

The unit price may be calculated for several reasons. It allows for an easy comparison of the cost of the same quantity of items that come in different sizes. It may be used to find the cost of a single item when many items are purchased together. This may be required if the items are going to be resold or divided among several people with each person paying their fair share of the cost based on how many items they receive.

For example, say you want to know what the better bargain is between buying 4 six packs of beer or a single 24 beer case:

If the six pack costs $6.00 and the case costs $18.00 then the unit cost of the six pack peer is $1.00 ($6.00/6 = $1.00) and the unit cost of the case is $0.75 ($18.00/24 = US$0.75). Therefore, the case is the better deal because $1.00 > $0.75.

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