Demonstration: Food Product Costing & Break-Even

DEMONSTRATION — Food Product Costing Model Self-initiated sample created with AI assistance. Hypothetical inputs; no client engagement or commercial results claimed. Objective: show a transparent costing method for a 100 kg batch packed into 200 units of 500 g, assuming no process loss. Inputs: ingredients USD 180; packaging USD 60; direct labor USD 40; utilities USD 20. Total variable batch cost = 180 + 60 + 40 + 20 = USD 300. Unit variable cost = 300 / 200 = USD 1.50. Scenario: net selling price USD 2.50/unit. Unit contribution = 2.50 - 1.50 = USD 1.00; contribution margin = 40%. Assuming monthly fixed costs of USD 1,000, break-even = 1,000 / 1 = 1,000 units/month. This excludes tax, financing and distribution unless entered separately. Sensitivity: a 10% ingredient price increase adds USD 18/batch and USD 0.09/unit. Contribution falls to USD 0.91/unit and break-even rises to 1,099 units rounded up. Excel implementation specification: separate input cells, quantity-times-price ingredient lines, SUM of variable costs, unit conversion checks and ROUNDUP for break-even. This case presents the calculation method; it does not claim an attached Excel workbook. Quality checks: batch mass / pack mass = units; cost categories do not overlap; currency and period are explicit. Real projects require measured yield, actual quotes, labor allocation and a complete cost boundary.