An interactive explainer
What does this actually cost?
Every price is an argument made of parts. Move one part and the whole argument changes. Most of the time nobody notices until the month closes.
The build
Costs stack. The offer sits above them. The gap between is everything you get to keep.
Drag any input. Watch what happens to the gap.
- Materials
- 40.00
- Wastage
- 3.20
- Labour
- 15.00
- Cost to build
- 58.20
- Price at target markup
- 78.57
- Offer
- 82.00
- Rebate given back
- − 4.10
- You keep
- 19.70 / 24.0%
The offer no longer covers the cost to build. Every unit sold widens the loss.
The point
A price has to survive everything that happens after you quote it.
Input costs move. Currencies move. A customer negotiates a rebate three levels down in a contract nobody reads. A quote gets accepted four days after the number that produced it stopped being true.
Six inputs and one output is the easy version. Real commercial systems carry hundreds of them, across contracts, currencies, floors and approvals, and they have to agree with the ledger at the end of the month. That reconciliation is the actual work.