Production
Work out your cost price, piece by piece
Your cost price is everything a piece costs you before you earn your first euro: materials with their waste, your time paid at its true cost, and your fixed costs spread across production. Below this price, you're paying to work.
The formula
Cost price per piece = (materials × (1 + waste) + minutes ÷ 60 × real hourly cost) ÷ number of pieces
Floor price = cost price ÷ (1 − risks − fees)
Recommended price excl. VAT = cost price ÷ (1 − target margin on selling price)
Worked example
Batch of 20 loaves (simplified example). Flour 6 kg, including 3% waste = €4.57 excl. VAT. Time 90 min at €29.50/h incl. social charges = €44.25. Cost: €48.82 excl. VAT, i.e. €2.44 excl. VAT per loaf. With a 35% margin: €3.76 excl. VAT. Here flour is less than 10% of the cost: it's the time that sets the price.
Mistakes that cost you
- Not counting your time, or counting it without social charges.
- Counting materials without waste (offcuts, failed bakes, unsold production).
- Mixing up the two margins: cost × 1.35 gives a 35% margin on cost, but only 25.9% of the selling price. To keep 35% of the selling price (the margin on selling price), divide the cost by 0.65.
Is VAT part of the cost price?
If you reclaim it on your purchases, no: count your materials excl. VAT. If not (a small-business exemption scheme, for example), it's a cost: count incl. VAT. Your accountant will tell you which applies to you.
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