Average cost - Sales Glossary - Upnify
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Average cost

The average cost in companies refers to the cost of production per unit of product, and is calculated as follows:

[Total fixed costsVariable costs][Total units produced]

The purpose of its use is to determine the value of each unit present in the warehouse of a company or business. By calculating an average based on production costs, it becomes possible to offer items at a more competitive price. This aspect is considered highly significant for the majority of consumers. Moreover, this cost has a direct impact on the profitability of the business or company, underscoring the importance of maintaining accurate records of this information.

The Sales Glossary is a compendium of all the most commonly used terminology in sales strategy. Many of the concepts listed here are used when implementing a CRM system or a digital sales funnel, no matter if they are legacy systems or an online CRM. See also our blog that deals with sales techniques, marketing and sales culture.