Browse MBAs SECTION 2: Managerial & Cost Accounting

The Pricing Floor Calculator

4 fill-in slots · from The AI Prompt Handbook for MBAs

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The Pricing Floor Calculator

Tell me the lowest price I can defensibly charge in different situations.

Product: [DESCRIBE]
Variable cost per unit: [AMOUNT]
Fixed cost contribution needed per unit at normal volume: [AMOUNT OR
DERIVE FROM FIXED COSTS AND VOLUME]
Situation: [NORMAL / EXCESS CAPACITY / DISTRESS / COMPETITIVE FIGHT]

Give me:
1. The absolute floor (variable cost) — below this every sale loses cash
2. The break-even price at normal volume
3. The target price for a healthy margin at [TARGET MARGIN %]
4. When it's rational to price below full cost, and for how long
5. The danger of anchoring customers or the market to a low price

Frame it as a floor, a break-even, and a target, so I know how much room
I actually have.

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