Processing math: 100%

Part Cost Calculator

Formula

The formula to calculate the part cost is:

$PC = \frac{TC}{P}$

Where:

$PC$ is the Part Cost (\$/unit)
$TC$ is the total production cost (\$)
$P$ is the total number of parts

What is Part Cost?

Part cost refers to the cost per unit of a product, calculated by dividing the total production cost by the total number of parts produced. This metric is crucial for pricing, budgeting, and financial analysis in manufacturing and production processes.

Example Calculations

Example 1:

Total Production Cost (TC): $5000
Total Number of Parts (P): 1000

Using the formula:

$PC = \frac{5000}{1000} = 5 \text{ \$/unit}$

Example 2:

Total Production Cost (TC): $7500
Total Number of Parts (P): 1500

Using the formula:

$PC = \frac{7500}{1500} = 5 \text{ \$/unit}$