Scenario workbook: make assumptions visible
Use this sheet to compare three hypothetical pricing scenarios on one consistent basis. Choose one currency, one unit of sale, and one time period before filling the table. For example, monthly fixed costs must be compared with monthly sales volume, while price and variable cost must both describe the same unit. To print, use your browser’s Print command. This static sheet works without JavaScript, has no input fields, and does not store business figures; write on the printed copy.
Worked baseline
Suppose price is 50 per unit, variable cost is 30 per unit, and fixed costs are 1,000 for the chosen period. Contribution per unit is 50 − 30 = 20. Exact break-even volume is 1,000 ÷ 20 = 50 units. At 50 units, revenue is 2,500 and total variable cost is 1,500; the remaining 1,000 covers fixed costs. This is an arithmetic threshold, not a demand forecast.
Margin, markup and ROI checks
At unit cost 60 and price 100, gross profit is 40. Margin uses selling price as its denominator: 40 ÷ 100 = 40%. Markup uses cost: 40 ÷ 60 = 66.6667%. Keep those labels distinct when comparing price proposals. For a separate one-off ROI example, an initial 1,000 plus 200 in fees gives total investment of 1,200. If total value received is 1,500, net gain is 300 and simple ROI is 300 ÷ 1,200 = 25%. State whether fees, taxes and timing are included.
Compare three scenarios
| Scenario | Key assumptions | Price / unit | Variable cost / unit | Fixed cost / period | Break-even units | Margin / markup |
|---|---|---|---|---|---|---|
| A | ||||||
| B | ||||||
| C |
Review before deciding
For each scenario, write the expected sales volume, the evidence behind that estimate, and a date for reviewing the result. After the period ends, record actual volume, realized price and actual unit cost beside the forecast. A useful comparison states the variance and whether the original pricing assumption should change.
- Record the source and date of each cost, price, volume and return assumption.
- Test a downside case. Constant price, cost and demand rarely hold exactly.
- Keep observed results separate from hypothetical scenarios; update the sheet when evidence changes.
- Break-even omits capacity, tax and product-mix effects. Simple ROI omits timing and annualization.
Check arithmetic with the Break-Even Calculator, Profit Margin and Markup Calculator, and ROI Calculator. These tools calculate the assumptions supplied; they do not validate demand, cost completeness or investment risk.
References: OpenStax: Contribution Margin and Toronto Metropolitan University: Margins versus Markups.