Question
Distinguish between:
Unit Cost and Unit Price.
Unit Cost and Unit Price.
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Basis
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Unit Cost
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Unit Price
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Meaning
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Cost of unit can be defined as the cost incurred by a company to produce, store and sell one unit of sale of a particular product or service.
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Unit Price is the price at which one unit of sale is sold.
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Examples
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variable cost like raw material, packing material, sales commission, freight, etc.
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If the unit cost (i.e. the cost to prepare one cup of tea) is ₹ 3/ then obviously the unit price has to be more than the unit cost i.e. more than ₹ 3/ The tea vendor may have his unit priced at ₹ 4
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