Unit cost is the cost of one measured unit of completed work, such as one square metre of brickwork or one cubic metre of concrete.
Unit costs are built up from the labour, plant and materials needed to produce a single unit of work, including allowances for waste. They are used in estimating, cost planning and benchmarking, and allow costs from different projects to be compared on a like-for-like basis. A related measure used in early cost planning is cost per square metre of gross internal floor area. The terms are sometimes used loosely, but strictly:
- unit cost is what the work costs the contractor to carry out
- unit rate is the price charged, which usually also includes overheads, profit and risk
Related terms: unit rate, unit of measure, benchmarking, cost plan.
