How to price baked goods

1. Cost the ingredients per batch. For each one: pack price × amount used ÷ pack size.
2. Add labor. Hours on the batch × what you pay yourself per hour.
3. Add overhead. A share of electricity, rent and equipment per batch.
4. Divide by portions, add packaging. That's your cost per item.
5. Price for your margin. Cost ÷ (1 − margin). At 60% margin a $1.20 cookie sells for $3.00.
6. Check the market. If local prices are far below yours, look at batch size, waste and recipe cost before cutting the price.

Example: a batch of 24 cookies uses $6.00 of ingredients, 1 hour of labor at $12 and $2.00 overhead: $20.00. Per cookie $0.83, plus $0.10 bag = $0.93. At 60% margin: $2.33.

Try your own recipe in the free calculator.