Understanding the Cost Breakdown

The Cost Breakdown panel appears on every product page and updates in real time as you add or change cost components. This article explains what each line means.

Cost Breakdown lines

Material Cost

The sum of all materials added to the product, each calculated at their configured cost per unit multiplied by the quantity used (and adjusted for any waste factor). This includes raw materials, packaging, consumables, and components.

Labour Cost

The sum of all labour entries on the product. Each entry is calculated as (minutes / 60) × hourly rate. If multiple labour entries have different rates, they are each calculated separately and summed.

Machine Cost

The sum of all machine time entries on the product. Each entry is calculated as hours used × machine cost per hour.

Overhead Allocation

A portion of your indirect business costs assigned to this product. Overhead is configured at the business level (Settings > Cost Centers) and can be allocated by time, by product unit, or as a fixed amount. This line shows the calculated allocation for one unit of this product.

If overhead allocation is not configured, this line shows zero and your total cost will be understated.

Total Cost

The sum of Material Cost + Labour Cost + Machine Cost + Overhead Allocation. This is the full cost of making one unit. Your selling price must exceed this number for the product to be profitable.

Selling Price

The price you have set for this product. You enter this on the Pricing tab.

Gross Margin

The difference between the selling price and the total cost, expressed as a percentage of the selling price.

Gross Margin = (Selling Price - Total Cost) / Selling Price × 100

A gross margin of 40% means 40 cents of every euro of revenue is gross profit (before business overheads that are not in the cost model).

Worked example: Soy Candle 200g

Component	Cost
Soy wax (180 g)	€1.15
Vanilla fragrance oil (30 mL)	€1.08
Cotton wick (1 unit)	€0.15
Glass jar (1 unit)	€0.45
Label (1 unit)	€0.08
Material Cost	€2.91
Labour: measuring & pouring (10 min at €15/hr)	€2.50
Labour: cooling & trimming (5 min at €15/hr)	€1.25
Labour: labelling & packaging (5 min at €15/hr)	€1.25
Labour Cost	€5.00
Heat gun (3 min at €6/hr)	€0.30
Machine Cost	€0.30
Overhead Allocation	€4.00
Total Cost	€12.21
Selling Price	€20.35
Gross Margin	40%

In this example, materials are only 24% of total cost. Labour (41%) and overhead (33%) dominate. Artisans who only count materials end up chronically underpricing their work.