> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Cost Per Unit: Average Product Cost Per Item Sold

> Track the average cost of goods sold per unit. Learn the formula, see examples, and optimize product cost efficiency across your catalog.

<Tip>
  The average cost of goods sold per unit sold.
</Tip>

## Formula

<Info>
  **Cost Per Unit** = **COGS** ÷ **Units Sold**
</Info>

### Formula Components

| Metric                                                        | Definition                                                         |
| ------------------------------------------------------------- | ------------------------------------------------------------------ |
| [**COGS**](/reference/metrics/orders/cogs/cogs)               | Total cost of goods sold including manufacturing or purchase costs |
| [**Units Sold**](/reference/metrics/orders/counts/units-sold) | Total quantity of individual product units sold                    |

| Metadata        |                             |
| --------------- | --------------------------- |
| **Type**        | Currency                    |
| **Data Source** | [Shopify](/sources/shopify) |
| **Aggregation** | Average                     |

***

## Example

Your store sold **8,500 units** this month with a total COGS of **\$42,500**:

| Metric            | Value      |
| ----------------- | ---------- |
| Total COGS        | \$42,500   |
| Units Sold        | 8,500      |
| **Cost Per Unit** | **\$5.00** |

***

## How It Works

Cost Per Unit divides your total cost of goods sold by the number of units sold. This gives you the average cost to produce or acquire each unit in your catalog. Unlike COGS Per Order, this metric focuses on individual items rather than order baskets.

***

## When to Use

| Scenario                   | Action                                            |
| -------------------------- | ------------------------------------------------- |
| Evaluating product margins | Compare cost per unit against selling price       |
| Pricing decisions          | Ensure prices cover unit costs plus target margin |
| Supplier negotiations      | Benchmark against industry standards              |
| Inventory optimization     | Identify high-cost products to prioritize         |

***

## Related Metrics

| Metric                                                                     | Relationship                                         |
| -------------------------------------------------------------------------- | ---------------------------------------------------- |
| [COGS](/reference/metrics/orders/cogs/cogs)                                | Numerator—total cost divided to get per-unit average |
| [Units Sold](/reference/metrics/orders/counts/units-sold)                  | Denominator—count of items sold                      |
| [COGS Per Order](/reference/metrics/orders/cogs/cogs-per-order)            | Similar metric but per order instead of per unit     |
| [Gross Profit](/reference/metrics/orders/contribution-margin/gross-profit) | Revenue impact after subtracting product costs       |

[See all Performance metrics →](/reference/metrics/orders/performance)