Unit pricing puts the risk of quantity on the client and the risk of productivity on the contractor. Tile at $14 a square foot installed: the client pays for the feet that go down, and the contractor makes or loses money on how fast the setter lays them. It's common for flooring, fencing, concrete flatwork, painting by the square foot and anything where the quantity is uncertain until the work is measured. The unit price has to carry material, labor at the burdened rate, waste, overhead and profit, per unit.
A worked number
Tile at $14 a square foot. Material $4.20, setting materials $0.90, waste at 10% $0.51, labor $5.10 at the burdened rate. Direct cost $10.71. At a 20% overhead rate and 8% profit the price needs to be $10.71 divided by 0.72, or $14.88. Quoting $14 because "that's the market" gives away $0.88 on every foot, $1,400 on a 1,600-square-foot job.
The mistake it hides
Productivity assumptions that come from the best day. A unit price built on 400 square feet a day loses money on every 320-square-foot day, and most days are 320. Cost real jobs by the unit after the fact and the real rate appears.
In Obra
Record each job's material and labor with its quantity in the description, and the achieved cost per unit is an export away, which is how next season's unit prices get honest. The markup to margin calculator turns a unit cost into a unit price at the margin the business needs.