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The unit cost is the price incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs and all variable costs involved in production. Cost unit is a form of measurement of volume of production or service.
Total costs = fixed costs + (unit variable cost × number of units) Total revenue = sales price × number of unit These are linear because of the assumptions of constant costs and prices, and there is no distinction between units produced and units sold, as these are assumed to be equal.
In business economics cost breakdown analysis is a method of cost analysis, which itemizes the cost of a certain product or service into its various components, the so-called cost drivers. The cost breakdown analysis is a popular cost reduction strategy and a viable opportunity for businesses.
When proportionate changes in the same figure over a given time period expressed as a percentage is known as horizontal analysis. [2] Vertical or common-size analysis reduces all items on a statement to a "common size" as a percentage of some base value which assists in comparability with other companies of different sizes. [3]
The unit of analysis is the entity that frames what is being looked at in a study, or is the entity being studied as a whole. [1] In social science research, at the macro level, the most commonly referenced unit of analysis, considered to be a society is the state (polity) (i.e. country). At meso level, common units of observation include ...
In economics, average cost (AC) or unit cost is equal to total cost (TC) divided by the number of units of a good produced (the output Q): A C = T C Q . {\displaystyle AC={\frac {TC}{Q}}.} Average cost is an important factor in determining how businesses will choose to price their products.
Social exchange theory is a sociological and psychological theory that studies the social behavior in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits. The theory also involves economic relationships—the cost-benefit analysis occurs when each party has goods that the other parties value. [1]
In economics, unit of account is one of the functions of money. A unit of account [1] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the ...