About Unit Prices
Calculating the unit price of items allows for a price comparison between different size/quantity packaging combinations.
Unit pricing provides a a way to determine which package size or quantity provides the best value.
Unit size
With many everyday items we might purchase, there is usually a choice when it comes to size — the large "bulk" pack of laundry powder vs a small pack; a regular size chocolate bar vs a pack of small "fun" size chocolate bars.
As the concept of "buying in bulk" implies, usually the larger the pack, the better the value. Though not always, and sometimes it's not at all obvious which size offers the best deal. Which is where unit pricing comes in.
Unit price
The most straightforward way to compare two different size items at different prices is to calculate what the equivalent price would be if they were both the same size.
For example, let's say we want to compare bottled softdrinks, and we decide to use an arbitrary unit price of 1 Litre. If a 2 Litre bottle of softdrink at the local shops costs $2.00, then it's straightforward to determine that the unit price is $1 per Litre. However, it's a little less straightforward to calculate what the unit price of a 1.25L bottle costing $2.20 would be ($1.76 per Litre) even if in this case it would be obvious that the 2L bottle is better value.
Calculating unit prices
Commonly used unit prices are 100g or 1kg for products sold by weight, and 100ml or 1L for drinks and other products sold by volume.
Let's say we have a chocolate craving we want to indulge.
The local supermarket is selling a 39g chocolate bar for $2.00. However, a 180g block of chocolate sells for $3.50. How can we work out which option gives us chocolate at the best price?
Let's convert both to a unit price of 100g.
2 ÷ 39 × 100 = $5.13 per 100g
3.5 ÷ 180 × 100 = $1.94 per 100g
So the larger 180g block of chocolate is better value at $1.94 per 100g (just don't eat it all at once!).
The unit price of the 39g bar shows that we would be paying well over twice as much per unit of chocolate compared with the 180g block.