When a supplier raises the price of an input, the real question isn't "how much did cost go up" — it's "how much extra revenue do I now need to protect the profit I planned for." This tool answers that question in one page, and shows how much of the product's margin the increase has already eaten.
The Cost-Increase Budget Planner is a small, free financial calculator built around one recurring problem in cost accounting: an input cost goes up, and management needs a fast, defensible answer for what to do next.
It turns your sale price and unit cost, before and after the increase, into a single "margin-tightness" index and grades the product's cost efficiency on a six-step scale, from Excellent to Very Poor.
You choose how safe you want to be — Good, Very Good, or High Very Good — and the tool treats that as a target level of return on the assets tied up in the product.
It works backward from that target to the sales value, cost value, gross profit and net profit needed before and after the increase — and the exact revenue gap between them.
Cost increases are rarely announced with a recommendation attached. Someone still has to translate "cost went up by $10" into a pricing or sales decision. This tool exists to make that translation quick, consistent, and numeric rather than a guess.
Instead of debating whether to raise prices, teams get a concrete extra-revenue target to hit — something a sales manager can actually plan a campaign around.
It gives a repeatable, standardized way to flag which products are losing efficiency fastest as costs rise, so attention goes to the products that need it most.
Under the hood the tool combines a cost-volume-profit reading of your margin with a DuPont-style asset-turnover target. Five steps take you from raw inputs to a finished budget.
Gross profit per unit is simply sale price minus cost. The tool also builds a "standard coefficient" — a ratio that gets larger as the cost eats further into the sale price, and stays close to 1 when the margin is wide.
standard = (price − cost/2) / (price − cost)Both coefficients (before and after the increase) are placed on the same six-band scale — Excellent, Very Good, Good, Acceptable, Poor, Very Poor. Comparing the two bands shows exactly how much ground the increase cost you, e.g. "Very Good after Excellent."
You choose Good, Very Good, or High Very Good. Each corresponds to a target asset-turnover multiplier (4.5×, 3.5×, 2.5× respectively) applied to the product's share of company assets — the tighter the target, the smaller the multiplier.
The target multiplier and the asset share are combined to derive the net profit the product must generate, then the gross profit needed once the product's share of general expenses is added back.
The margin-tightness coefficient from Step 1 is applied to the required gross profit to derive the sales value and cost value that satisfy it — once with the before-increase coefficient, once with the after-increase coefficient. The difference between the two sales values is the extra revenue the cost increase now requires.
Five figures and one choice. All fields are required — the arithmetic depends on every one of them.
| Field | What to enter | Why it matters |
|---|---|---|
| Sale price | The selling price of one unit of the product. | The anchor figure every margin and coefficient is measured against. |
| Cost before increase | The unit cost as it stood before the supplier or input change. | Establishes the current, "before" margin and efficiency degree. |
| Cost after increase | The new, higher unit cost. | Must be greater than the cost before increase; drives the "after" reading. |
| Share of general expenses | The portion of company-wide fixed/general expenses allocated to this product. | Converts the required net profit into a required gross profit. |
| Share of assets | The product's share of total fixed and current assets. | Anchors the target asset-turnover multiplier that drives the whole budget. |
| Target degree | Good, Very Good, or High Very Good. | Sets how conservative the target return on assets should be. |
Validation rules: sale price must exceed cost before increase; cost after increase must exceed cost before increase; the asset share must be larger than the sale price and both cost figures (it represents a portfolio total, not a per-unit figure).
Fill in the five figures, choose a target degree, and the report on the right builds itself. You can download the finished report as a PDF to attach to a pricing memo or budget pack.
A plain-language grade for how much room is left in the margin. "Still Excellent" means the increase didn't push the product into a worse band. "Very Good after Excellent" means the increase was large enough to drop the product one band — a signal worth acting on, not just noting.
Each table is a small income statement: sales value, minus cost, equals gross profit; minus the expense share, equals net profit. Both tables target the same net profit — the after-increase table simply needs more sales value to reach it.
The single number most people came for: the additional revenue the product must generate, on top of its current run-rate, to keep delivering the net profit implied by your chosen target degree.
A reminder of how conservative the target was. Re-running the same inputs with a higher safety target (e.g. High Very Good) will always ask for less extra revenue, because it accepts a lower asset-turnover requirement — useful for sensitivity-checking the recommendation.
A product sells for $100. Its unit cost was $60 and has just risen to $70. It carries $15,000 of general expenses and $200,000 of asset share. Management wants at least a "Good" degree of safety.
| Sales value | 100,000.00 |
| Minus purchase / cost value | 60,000.00 |
| Gross profit | 40,000.00 |
| Minus expenses | 15,000.00 |
| Net profit | 25,000.00 |
| Sales value | 133,333.33 |
| Minus purchase / cost value | 93,333.33 |
| Gross profit | 40,000.00 |
| Minus expenses | 15,000.00 |
| Net profit | 25,000.00 |
Efficiency degree: Very Good after Excellent — the margin was excellent before the increase, and drops one band afterward. To hold the same $25,000 net profit target, sales value must climb from $100,000 to $133,333.33: an extra $33,333.33 in revenue, or roughly a third more units at the new price, before the increase is fully absorbed.