The Unit Cost Comparison
- the key to getting the best deal

The key to getting the best deal is the per-unit cost.

Fortunately, many grocery stores include the per-unit cost right on the price label, making it easy to compare similar items without having to do the math yourself.

But when sales or coupons are involved, you'll need to calculate the per-unit cost manually, to make sure you're really getting the best deal.

The formula to calculate the per-unit cost, or price per unit, is simply to divide the price by the unit. Units are measured in ounces, pounds, grams, liters, and quantity

per-unit cost = price / unit

Let's walk through an example. Suppose the 16 ounce box of rice sells for $1.99, the 32 ounce box for $2.99, and the 20 pound bag for $10.99.

per-unit cost for rice
Size Price Per-Unit Formula
16 ounce $1.99 12.4 cents 1.99 / 16
32 ounce $2.99 9.3 cents 2.99 / 32
20 pound $10.99 3.4 cents 10.99 / 320
1 pound = 16 ounces

Not surprisingly, the larger the size, the better the deal.

Also, notice that for the 20 pound bag, we first had to convert pounds to ounces. Be aware of this situation, and make sure all calculations are based on the same units.

Now suppose the 16 ounce box goes on sale for 99 cents ?

Size Price Per-Unit Formula
16 ounce $0.99 6.2 cents 0.99 / 16

That drops its per-unit price to 6.2 cents, lower than the 32 ounce box, but still more expensive than the regular price 20 pound bag.

By the way, did you notice that the sale price was 50% off ? If you did, you could have quickly slashed the 12.4 cents in half, to get 6.2 cents.

So remember the simple per-unit cost formula, and you'll always know what the best deals are.