Definition: The average cost amount for a product or an aggregated level of products

Note: This only includes products that have costs

Equation: Total Costs / Total Units

Example: Average Cost per Unit gives the retailer the opportunity to see if costs for a product or a group of products is getting too high. Seeing this measure alongside Average Item Price will allow the retailer to see how much profit, on average, they made per unit by subtracting Average Cost per Unit out of Average Item Price