Determining the cost of a single item within a larger quantity involves dividing the total expense by the number of individual items. For example, if a package of 12 pens costs $6.00, the price for a single pen is derived by dividing $6.00 by 12, resulting in a cost of $0.50 per pen.
Understanding the individual cost of goods offers substantial advantages. It enables precise cost comparison between different products or suppliers, facilitating informed purchasing decisions. Furthermore, it is essential for accurate inventory management, profitability analysis, and setting competitive retail prices. Historically, this calculation has been fundamental to trade and commerce, allowing businesses and individuals to assess value and optimize resource allocation.