Cost structure
Understand why cost-informed pricing: minimum viable price = variable cost per unit (floor — below this you lose money on every unit).
In this lesson
Cost structure is part of Business Model & Competition. This preview shows how entrepreneurship-lab connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Imagine this situation: Your pastry business: rent 20000 in local currency/month (fixed), ingredients 300 in local currency/pastry (variable), packaging 50 in local currency/pastry (variable). You sell 200 pastries/month.
How it works
Cost-informed pricing: minimum viable price = variable cost per unit (floor — below this you lose money on every unit). Above variable cost but below total cost per unit (contribution margin) — each sale reduces fixed cost burden. Above total cost per unit (including fixed cost allocation) — true profit begins. Each threshold has strategic meaning.
Apply it to a real decision
Real-life money moment: Your pastry business: rent 20000 in local currency/month (fixed), ingredients 300 in local currency/pastry (variable), packaging 50 in local currency/pastry (variable). You sell 200 pastries/month. Total monthly costs? The key lesson is: Total costs: Fixed: 20,000.
Activity preview
Apply the idea
Use the lesson to complete this short practice activity.
Try one real money action
Open Tasks and submit proof for one task, or open Requests and make a deposit request. Parent approval can happen later.
Quiz preview
Cost structure includes:
Your pastry business: rent 20000 in local currency/month (fixed), ingredients 300 in local currency/pastry (variable), packaging 50 in local currency/pastry (variable). You sell 200 pastries/month. Total monthly costs?