When Calculating Your Costs...

Business By sweet1122 Updated 10 Jun 2009 , 6:24pm by indydebi

sweet1122 Posted 10 Jun 2009 , 4:18am
post #1 of 9

I'm trying to calculate my costs for a cake. I'm not selling, but trying to get a feel for what this is all really costing me. I can calculate all the big stuff, the butter, powdered sugar, eggs... I get that. How do you calculate (or do you) things like vanilla extract which seem almost insignificant on one cake?

And does anyone know how to account for the cost of electricity/water? Or do those not enter into your cake cost calculation? An average cake for me runs my dishwasher at least 3 times, and my oven for 2 hours, so... I'm sure that's a significant cost. I just don't know how to calculate them.

I have a hunch if I knew the real numbers I'd switch back to needlepoint so perhaps ignorance is bliss. icon_wink.gif

8 replies
__Jamie__ Posted 10 Jun 2009 , 4:28am
post #2 of 9

You know, the incidentals like vanilla extract really hit home when you finally get down to the last bit in that $30 bottle. Exaggerating a bit, but some stuff costs that much. goes there $30 all at once for one ingredient and you only have $40 from the customer you just collected on for that particular cake. Make sense? Not so incidental after all.

There are some great spreadsheets and programs out there, Cake Boss is one, and one of these days I'll sit down and get a little more specific with my numbers as well.

sweet1122 Posted 10 Jun 2009 , 4:36am
post #3 of 9

Thanks! Yeah, I just bought the Cake Boss software not long ago and am now taking the time to sit down and plug some things in. Very easy to use by the way. I've been resisting, but I've really got to get it all added up. I do enjoy it, but my friends have no idea how much their free cakes are costing me...

sweet1122 Posted 10 Jun 2009 , 6:07am
post #4 of 9

Not sure if this will help anyone, but I did an electrical analysis on my oven. It costs me (based on $.12/kwh) $1/hr to run my oven (5 years old). Still working on the dishwasher (also 5 yrs old). Can't find the dang electric label info thing, but I figure its about $.25/load.

Here's an online tutorial on how to calculate your electricity costs. It was most helpful.

http://www.tutorials.com/08/0822/0822.asp

indydebi Posted 10 Jun 2009 , 1:27pm
post #5 of 9

For a home baker who doesn't have a separate electric bill for their baking, it can be difficult. For a general rule of thumb, take your normal electric bill and divide it by 30 to get a daily elec usage. It's not exact, but it's more accurate than $1/hour for oven time.

You're not using just oven electricity ..... you're using a water heater, a mixer, a dishwasher, the overhead lights, your furnace or air conditioning, the refrigerator that's running constantly. All of this is wrapped up in my monthly shop electric bill and it's part of the cost of doing business. I don't get to pay for electricity ONLY when I'm baking a cake.

lchris Posted 10 Jun 2009 , 3:28pm
post #6 of 9
Quote:
Originally Posted by sweet1122

I'm trying to calculate my costs for a cake. I'm not selling, but trying to get a feel for what this is all really costing me. I can calculate all the big stuff, the butter, powdered sugar, eggs... I get that. How do you calculate (or do you) things like vanilla extract which seem almost insignificant on one cake?

And does anyone know how to account for the cost of electricity/water? Or do those not enter into your cake cost calculation? An average cake for me runs my dishwasher at least 3 times, and my oven for 2 hours, so... I'm sure that's a significant cost. I just don't know how to calculate them.

I have a hunch if I knew the real numbers I'd switch back to needlepoint so perhaps ignorance is bliss. icon_wink.gif




icon_eek.gif 3 times! Really?

indydebi Posted 10 Jun 2009 , 3:50pm
post #7 of 9
Quote:
Originally Posted by lchris

Quote:
Originally Posted by sweet1122

I'm trying to calculate my costs for a cake. I'm not selling, but trying to get a feel for what this is all really costing me. I can calculate all the big stuff, the butter, powdered sugar, eggs... I get that. How do you calculate (or do you) things like vanilla extract which seem almost insignificant on one cake?

And does anyone know how to account for the cost of electricity/water? Or do those not enter into your cake cost calculation? An average cake for me runs my dishwasher at least 3 times, and my oven for 2 hours, so... I'm sure that's a significant cost. I just don't know how to calculate them.

I have a hunch if I knew the real numbers I'd switch back to needlepoint so perhaps ignorance is bliss. icon_wink.gif



icon_eek.gif 3 times! Really?


Wow. And most home dishwashers have a run cycle of 60-120 minutes .... if dishes aren't sanitized by heat or chemicals, then they are sanitized by time in the washing/rinsing cycle. Which is why my dishwasher at the shop runs a complete wash/rinse cycle in 55 seconds and my home dishwasher runs for 2 hours.

You'd use less water and electricity to wash them by hand.

sweet1122 Posted 10 Jun 2009 , 6:08pm
post #8 of 9

If its dishes like cups and spoons and plates they go in the dishwasher. I wash my KA stuff and cake pans by hand. That's it though. I hate washing shortening and oil out of a measuring cup. I'll let the dishwasher do it. And I knowingly pay for it. I also feel its more sanitary and I don't have the patience or discipline to wash everything in hot water the way I should to be sure they get clean.

Debi, I guess I know that I use a lot more than my oven, but I can't calculate everything. I was trying to get a handle on what I can actually calculate. And since I can calculate my oven usage, at least I can understand that it costs me $1/hr to run my oven and $0.25/load to run my dishwasher. Refrigerator, water, lights, and everything else, I can't get a tangible amount on. And Electric bill divided by 30 includes personal use electricity too, so I don't see how that's any better. For tax purposes I was told to take 1/10 of my electricity usage for the days I baked to use for tax deductions. Since I'm not selling, I'm not really doing that, but I'm trying to get a feel for what it all costs. I appreciate any advice as I am trying to learn before I make potential huge mistakes! Thanks!

indydebi Posted 10 Jun 2009 , 6:24pm
post #9 of 9

Oh I totally understand how you can't figure it exact ...... and now that you mention it, the percentage of square footage rule is a good one to go by. I know that some of it is personal ... I tried to illustrate that with my shop's electric bill. Even tho' some of the electricity is "personal" (my computer, my TV, the lights when I'm not baking) it's still an expense and has to be built into each cake/catering.

This is a great example of how CC helps! Lots of ideas and suggestions come in from all directions and we can pick the ones that work best for us!! thumbs_up.gif

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