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4.10 F) Unit Pricing – Part 1
4.10 F) Unit Pricing – Part 1
Unit pricing appears in many places in the real world and it enables consumers to make comparisons about which options are better value. For example, when you go to the supermarket to purchase cans of fizzy drink, you are given a choice of many different quantities. For example, you can purchase the cans individually, in packs of 6 and in packs of 18. From the prices of the different packs, we are able to work out the unit cost, and from the unit cost, we can then find out which pack is the best value for money. The pack that is the best value for money will have the lowest unit cost. Let’s have an example of a question.
Example 1
There are three different ways that I can purchase cans of Fanta and the three options are shown below:
What is the price of a can in each of the packs and which pack is the best value for money?
We are able to find out the cost per can by dividing the price for the pack by the number of cans in the pack in question. The formula is shown below:
There are three different ways that I can purchase cans of Fanta and the three options are shown below:
- 2 cans for £1
- 6 cans for £2.40
- 18 cans for £4.50.
What is the price of a can in each of the packs and which pack is the best value for money?
We are able to find out the cost per can by dividing the price for the pack by the number of cans in the pack in question. The formula is shown below:
Option 1
The first option costs £1 and there are 2 can. We can sub these numbers into the formula:
The first option costs £1 and there are 2 can. We can sub these numbers into the formula:
Therefore, the cost per can (or unit cost) is 50p.
Option 2
We use the same formula for option 2. The second option costs £2.40 and there are 6 cans in the pack.
Option 2
We use the same formula for option 2. The second option costs £2.40 and there are 6 cans in the pack.
The cost per can for the second option is 40p.
Option 3
We now do the same for the final option. The final option costs £4.50 and there are 18 cans in the pack.
Option 3
We now do the same for the final option. The final option costs £4.50 and there are 18 cans in the pack.
The cost per can for the final option is 25p.
Compare the Unit Costs
The final step in answering this question is to compare the unit costs. The three costs per can were 50p for the first option, 40p for the second option and 25p for the final option. The third option has the lowest cost per can, and this means that the third option offers the best value for money.
Compare the Unit Costs
The final step in answering this question is to compare the unit costs. The three costs per can were 50p for the first option, 40p for the second option and 25p for the final option. The third option has the lowest cost per can, and this means that the third option offers the best value for money.