1. What is Profit Per Unit?

Profit per unit is the amount of money earned from selling one unit of a product after accounting for its production or acquisition cost. It's a fundamental metric in business to assess product profitability.

2. How Does the Calculator Work?

The calculator uses the profit equation:

Where:

• Selling Price — The price at which the product is sold to customers
• Unit Cost — The cost to produce or acquire one unit of the product

Explanation: The equation simply subtracts the cost from the selling price to determine the profit earned per unit sold.

3. Importance of Profit Calculation

Details: Calculating profit per unit helps businesses set appropriate pricing, determine product viability, and make strategic decisions about production and sales.

4. Using the Calculator

Tips: Enter the selling price and unit cost in your local currency. Both values must be positive numbers (unit cost can be zero for digital products with no marginal cost).

5. Frequently Asked Questions (FAQ)

Q1: What if my profit is negative?
A: A negative profit indicates you're selling below cost, which is unsustainable long-term unless it's a loss leader strategy.

Q2: How does this relate to markup?
A: Markup is (Selling Price - Cost)/Cost, expressed as a percentage, while profit is the absolute difference.

Q3: Should I include fixed costs?
A: This calculates gross profit per unit. For net profit, you'd need to allocate fixed costs across units.

Q4: What currency does this use?
A: The calculator works with any currency - just ensure both inputs are in the same currency.

Q5: How precise should my inputs be?
A: Typically 2 decimal places (cents/pence) for most currencies, but adjust based on your pricing precision.