Understanding Unit Prices
Posted on Tuesday, August 16th, 2011 at 8:12 am
Whether you use coupons or not, understanding unit prices can help you make the best buying decisions and save money. Often, there are several comparable products to choose from – how do you know which one is the best price? The easiest way to find out is by calculating the unit price.
What is the Unit Price?
Unlike the total price of an item, the unit price is the price per unit when the whole item is broken down into smaller individual units. For example, the price per ounce (rather than the price per bottle). The broken down units will allow you to easily compare the price of different items.
How Do You Calculate the Unit Price?
Often, the unit price is already displayed on the price sticker below the item. On fresh items, such as deli items, the unit price may be displayed directly on the packaging. However, stores often post unit prices of comparable items in different, incomparable units. If you are using a coupon, you’ll also want to know how to calculate the unit price, taking the coupon into account. You can use these simple equations to calculate unit prices on your own:
- Unit price = total price / total number of units. For example, unit price = total price ($5) / total units (16 ounces). Therefore, the unit price is about 31 cents.
- If you are using a coupon on the item, then you would alter the equation as follows: unit price = (total price – coupon) / total number of units.
If you have a calculator on your cell phone, you can program these equations directly in for added convenience. If you don’t, just take a calculator with you when you go shopping. Once you know the equation, calculating unit prices is a breeze!
Tips for Understanding Unit Price:
Make sure that when you are comparing unit prices that the units are the same. For example, make sure you are comparing ounces to ounces and not ounces to quarts. This is an easy detail to overlook and can make comparing unit prices confusing. Here are some common unit conversions that will help you calculate unit prices:
- 16 ounces = 1 pound
- 1 ounce = 28.35 grams
- 8 fluid ounces = 250 ml
- 2 cups = 1 pint
- 1 quart = 1 liter or 2 pints
- 1 gallon = 8 pints or 4 quarts
- 1 pound = 16 ounces
Knowing how to calculate the unit price will help you to avoid making the wrong assumption. Often, shoppers assume that bulk or generic brands are cheaper. While this is often true, it is not always true. By taking a few seconds to calculate the unit price, you will be able to remove all doubt and know you are making the most budget wise purchase.