1. Set the reporting scope
Enter the total variable cost associated with one unit or order.
2. Enter the primary value
Set the desired contribution margin as a percentage of the realized selling price.
3. Add supporting inputs
Enter the discount customers are expected to receive from list price.
4. Review the result
Review the recommended list price and the realized price after discount.
5. Compare and act
Check the result against customer willingness to pay and competitor positioning.