In short
A capstone costing starts from your line-by-line concentrate cost, adds alcohol, water, packaging, labor and losses, and states the cost of one finished unit at two batch sizes, with each figure marked as a quote, a measurement or an estimate. You practiced the concentrate calculation in the cost study guide. This lesson goes on to the finished item. It does not tell you what to charge, since the pricing guide covers that.
What you will learn
- Cost a fragrance from concentrate to finished unit
- Compare costs at two batch sizes
- Separate quotes from estimates
Before this lesson: Evaluation Plan
A worked sheet, all prices invented
Take a 50 ml bottle holding 40 g of liquid, at 15% concentrate. Your density and fill must be measured, as the figure here is a stated assumption.
| Item | Basis | Calculation | Cost |
|---|---|---|---|
| Concentrate | 120 per kg, your costing | 0.006 kg × 120 | 0.72 |
| Alcohol and water | 10 per kg, a quote | 0.034 kg × 10 | 0.34 |
| Bottle, pump, cap, box, label | Quotes for 500 units | Sum | 3.00 |
| Filling and labor | Estimate: 3 minutes at 20 per hour | 0.05 h × 20 | 1.00 |
| Losses | Estimate: 5% of liquid | (0.72 + 0.34) × 0.05 | 0.05 |
| Subtotal | 5.11 |
The concentrate is about 14% of this unit's cost, and the packaging is about 59%. This surprises many learners. It also shows that cutting a beautiful material to save a little may not matter much, depending on the product. Your own figures may well look different.
What's still missing
This subtotal excludes testing, safety assessment, regulatory work, freight, duty, marketing, retailer margins and taxes on the product. List these separately, even if only as "not estimated", so nobody mistakes a unit cost for the whole cost of a launch. Some are large one-time costs. If you divide one across a batch, say what batch you assumed. Alcohol taxes vary greatly by country and can change the answer: find out how yours work.
Two batch sizes
Recost at, say, 100 units and 1,000 units. For each, note what changes: price breaks, minimum orders, losses, time per unit and packaging. If a minimum order means buying far more of a material than you need, include it, and note that you will have stock left. Use the requirements calculation to find the quantities.
A sensitivity check
Change one thing at a time and watch the total move:
- Your most costly material rises 30%.
- Concentrate goes from 15% to 20%.
- Packaging costs 25% more.
- Losses double.
In the example above, raising the concentrate to 20% means 0.008 kg of concentrate, or 0.96, and 0.032 kg of alcohol and water, or 0.32. The subtotal moves by only about 0.22. A change in packaging cost has a bigger effect. Knowing this helps you decide where to spend your attention.
Compare with your constraint
Go back to your concept page. If you set a limit per kilogram of concentrate, did you meet it? If not, either reduce cost using the method you learned, or state why you would accept it. You can't change the constraint without noting it.
Practical exercise: A full capstone costing
- Measure your actual fill by weight, using water or your product in a real bottle.
- Build the sheet for your capstone, marking each number as a quote, measurement or estimate, with date and source.
- Repeat for a second batch size.
- Run the four sensitivity changes.
- List what's excluded, and write two sentences on what drives your cost.
You have done this well if someone can follow every number, your estimates are labeled as such, and exclusions are clearly stated.
Common mistakes
- Costing only the concentrate. It may not be the largest part.
- Using sample-size prices for a large batch. Or the reverse.
- Forgetting labor because it is your own. Record it, and decide later.
Knowledge check
Written and reviewed by the RUŌOD Lab team. This is general education, not legal, regulatory, medical or safety advice. Example dilutions and exercises are for learning, are not validated products, and have not been safety-assessed. Completing a lesson confers no qualification. How we check these lessons.