Production Cost Calculator

How it is calculated

All three cost amounts are for the same production run, in dollars, and the unit count is the number of finished units that run produced. The tool computes total cost = materials + labor + overhead, then cost per unit = total cost ÷ units and overhead share = overhead ÷ total cost × 100. The overhead share shows how much of the total is indirect cost, which helps you see whether the price of a unit depends on factory costs or on inputs. Costs cannot be negative and units must be at least 1. If total cost is 0, the overhead share is 0. The tool does not spread overhead by machine hours or labor hours, and does not include selling costs, tax or a profit margin.

Common mistakes

• Entering the cost of one unit in the materials box while giving the total unit count. All three cost fields must be for the whole batch, not per unit.
• Counting units started instead of units finished. Defective or scrapped items should not be in the unit count, or the per-unit cost looks too low.
• Leaving overhead at 0 because it is hard to measure. Rent, utilities and equipment wear are real costs, and the per-unit cost will be understated.
• Using different periods for the cost fields, such as a month of overhead with one week of materials. They must cover the same run.
• Treating the cost per unit as the selling price. It has no profit, selling cost or tax in it.