Thursday, November 1, 2012

What is price per unit?

My wife and I were at a home improvement store to buy some stain for our fence.  We like to maintain the assets that we buy so we wanted to make sure our fence looked new when we sold our house.  I knew that the fence would take between 4 and 5 gallons of stain to complete.

At the store we found the color we liked and noticed that the stain came in 1 gallon and 5 gallon cans.  Which on was cheaper?  Most of us have a smart phone with a calculator on it.  I simply pulled out my calculator and figured out the price per unit.  In other words, was it cheaper to buy five separate one gallon cans or a single five gallon can?

I took the price of the 5 gallon can and divided it by 5.  This told me to cost of the price per gallon.  I then compared the price I just calculated to the price of the 1 gallon cans.  The 1 gallon cans were saving me $.10 a can.  Not much, but it does add up over time.

If you do not have a calculator or paper and pencil on hand, just ask a store attendant.  In the home improvement stores, they have calculators everywhere.

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