Finance Tools
Commodity Price Change Margin Calculator
Estimate how a commodity price change affects unit margin and annual profit based on your usage per unit and production volume.
Calculate how a commodity price change affects your unit margin and annual profit based on usage per unit and production volume.
Current purchase price per commodity unit.
Use negative values for price declines.
How much commodity is consumed per unit produced.
Total units produced/sold per year.
Average realized price per unit.
All non-commodity costs per unit.
Commodity cost per unit
Current: $5.76
New: $6.34
Change: +$0.58
Unit margin
Margin: $1.74 → $1.16
Margin %: 9.67% → 6.47%
Change: -$0.58
Annual profit impact
Annual profit: $87,000 → $58,200
Profit change: -$28,800
Annual profit here is approximated as unit margin × annual volume.
Price pass-through (simple)
Required selling price to keep original unit margin: $18.58
Required price increase: $0.58 (3.20%)
Assumes constant volume and other costs.
Tip: If your commodity price can go both ways, test negative and positive scenarios to bracket your risk.
How it works
- Commodity cost per unit = usage per unit × commodity unit price.
- Unit margin = selling price − (commodity cost + other unit costs).
- Annual profit ≈ unit margin × annual volume.
- Pass-through estimate shows price needed to keep the original unit margin.
FAQ
Why allow negative price change?
Commodity prices move both ways. Negative scenarios help you estimate upside too.
Is annual profit here “true profit”?
It’s a unit-economics approximation. For full P&L, use a total-cost profit tool.
How to use this commodity price change margin calculator
- Enter current commodity unit price and expected price change percentage.
- Enter commodity usage per product unit and your annual production volume.
- Enter selling price per unit and non-commodity unit costs.
- Review new unit margin and annual profit impact.
Example
A product uses 1.8 units of a commodity at $3.20/unit. Price increases 10%. You produce 50,000 units/year, sell at $18/unit, and other unit costs are $10.50.
- Commodity cost/unit = 1.8 × 3.20 = 5.76
- New commodity cost/unit = 1.8 × (3.20 × 1.10) = 6.34
- Unit margin recalculates from selling price − (commodity + other costs)
- Annual profit impact = unit margin change × 50,000 units
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