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Recipe costing

What should one serving cost?

• Start with the whole batch, including your time.

Ingredients alone do not tell you the full cost.

01 · Include usable yield

Cost the ingredients you actually use.

• Flour $1.00 + butter $1.60
• Strawberries: $5 / 500 g
• 80% usable yield · use 200 g

Ingredients: $5.10

Strawberry cost: $5 × 200 ÷ (500 × 0.80) = $2.50.

02 · Add time and overhead

Count the full batch cost.

• Ingredients $5.10
• Labor $16.00
• Allocated overhead $2.90

Batch cost: $24.00

These sample costs include labor and allocated overhead.

03 · Divide by portions

Eight servings. One clear cost.

• Batch cost ÷ servings
• $24.00 ÷ 8

$3.00 per serving

Use the number of portions you can actually sell.

04 · Set an explicit target

For a 40% margin on entered costs…

• Price = cost ÷ (1 − margin)
• $3.00 ÷ (1 − 0.40)

Price: $5.00

Fees, tax and unallocated overhead are excluded here.

Try your own numbers

Build your recipe cost.

• Open the Recipe Cost Calculator.
• Download the editable worksheet.
• Check yield, time and portions.

Find Recipe Cost under Kitchen at profimetrics.online.

Campaign profitability

Is a 3× ROAS profitable?

• The answer depends on what you keep before ad spend.

ROAS compares attributed revenue with ad spend.

01 · Define your margin

Keep 40 cents from each dollar.

• Net revenue less variable costs
• Include product, fees and fulfillment.
• Exclude advertising from this margin.

Contribution margin: 40%

Use contribution margin before advertising, not net margin.

02 · Find the threshold

Break-even ROAS starts with margin.

• Break-even ROAS = 1 ÷ margin
• 1 ÷ 0.40

Break-even: 2.5×

At 40% contribution margin, each $1 of ads needs $2.50 in revenue.

03 · Test one campaign

$1,000 in ads. $3,000 revenue.

• Observed ROAS = 3×
• $3,000 × 40% = $1,200
• $1,200 − $1,000 ad spend

$200 after ads

That is contribution after ads, before fixed overhead and tax.

04 · Check the assumption

At a 25% margin, 3× loses money.

• $3,000 × 25% = $750
• $750 − $1,000 = −$250
• New break-even ROAS = 4×

Same ROAS. Lower margin.

Match revenue, costs and attribution to the same period.

Try your own numbers

Find your break-even ROAS.

• Open Break-Even ROAS.
• Enter contribution margin before ads.
• Download the campaign worksheet.

Find Break-Even ROAS under Marketing at profimetrics.online.

Pricing decisions

20% off can cut contribution in half.

• Follow one item from its original price to the discount.

This example excludes fees, fixed overhead and tax.

01 · Start with the unit

Price: $50. Unit cost: $30.

• $50 − $30 = $20 contribution
• $20 ÷ $50 = 40% margin

$20 per item

Contribution here means price less the stated unit cost.

02 · Apply the discount

A 20% discount means $10 off.

• $50 × (1 − 20%) = $40
• The unit cost stays at $30.

New price: $40

The customer pays 20% less. Your cost has not changed.

03 · Recalculate contribution

$40 − $30 leaves $10.

• Contribution falls from $20 to $10.
• New margin: $10 ÷ $40 = 25%.

50% less contribution

A price discount and a contribution decrease use different bases.

04 · Test the sales target

You need twice as many units.

• 100 units × $20 = $2,000
• 200 units × $10 = $2,000
• Assumes unchanged unit economics.

Demand is not guaranteed.

Check capacity, fees and extra costs before relying on more sales.

Try your own numbers

Check the margin before the offer.

• Open Discount Margin.
• Compare the original and sale price.
• Add fees in the pricing worksheet.

Find Discount Margin under Pricing at profimetrics.online.