How the product cost works
Formula. Full cost per unit = materials + (labour hours × hourly rate) + packaging + delivery + (monthly overheads ÷ units per month).
Example. 3.20 + (0.25 × 4) + 0.35 + 0.50 + (1,800 ÷ 1,200) = 6.55 per unit.
Tip. Overheads per unit fall as volume rises, so a busy month makes every unit cheaper. Price from a normal month, not your best one.