Food Cost
Food cost is what the edible ingredients in a batch cost you. The unit you buy in is
almost never the unit you bake in, so the calculator converts for you: buy a 50 lb sack of
flour for $22 and use 4 lb in a batch, and it charges the batch $1.76. Shipping and
freight get spread across the amount you bought, because a $15 delivery fee on a 50 lb
sack is a real part of what that flour costs.
Labor
Labor is the time your batch takes, priced at what that time costs. A
wage of $18 per hour is "1 hour for $18" - then enter the amount of time a batch
consumes. Most small producers leave their own time out and are surprised by how thin
their margins get once it goes in, which is exactly why it belongs here.
Packaging
Packaging is jars, lids, pouches, labels, and cartons - the things you use one of per
finished package rather than one of per batch. Buying 1,000 labels for $80 and using
one per jar adds 8 cents to each package.
Overhead
Overhead is everything else a batch consumes: kitchen rent, utilities, insurance,
equipment. Pick a period, work out what it costs you, divide by the batches you run in
that period, and enter that as a per-batch amount. It is the cost most often left out of
a price, and the one that quietly decides whether a product makes money.