To calculate cost per ounce, divide what you paid by the number of ounces in the package: cost per ounce = price ÷ ounces. The work is in getting the ounces right. A 50 lb case of wax is 800 ounces, because a pound is 16 ounces; a kilogram is 35.27 ounces; a gallon is 128 fluid ounces. And a fluid ounce isn't an ounce: one measures space and the other weight, and they only match for water. In the example below, soy wax bought by the 50 lb case for $110 costs 13.75 cents an ounce, fragrance oil $1.75, and a 9 oz candle made from them costs 44 cents an ounce in materials and sells for $2.89 an ounce. Below is the formula, the conversions, weight against volume, a finished product's cost and price per ounce, and a free calculator.
The short version
- Cost per ounce = price paid ÷ ounces in the package.
- Convert first: 1 lb = 16 oz, 1 kg = 35.27 oz, 1 gallon = 128 fl oz, 1 liter = 33.81 fl oz.
- Ounces (weight) and fluid ounces (volume) are different; don't mix them in one recipe.
- Cost recipes by weight when you can; it's more accurate than cups and spoons.
- Per gram is the same idea, and easier for small amounts like fragrance oils.
- A finished product's cost per ounce is its materials ÷ its net contents; compare price per ounce the same way.
- TaroStack converts every unit for you and costs recipes from what you paid. More below.
The formula, and the conversions
| Bought in | Ounces in one | Grams or milliliters in one |
|---|---|---|
| Pound (lb) | 16 oz | 453.6 g |
| Kilogram (kg) | 35.27 oz | 1,000 g |
| Gram (g) | 0.035 oz | 1 g |
| Gallon (gal) | 128 fl oz | 3,785 ml |
| Quart (qt) | 32 fl oz | 946 ml |
| Liter (l) | 33.81 fl oz | 1,000 ml |
Cost per ounce = price ÷ (package size × ounces in one unit). A 25 lb bag of salt for $45 is $45 ÷ (25 × 16) = $45 ÷ 400 ounces = 11.25 cents an ounce.
A worked example: what you bought
Three of the made-up makers I use in these examples buy these: Windward Roots, a taro business, for food; Lehua Glow for candles; and Hoʻola Botanicals for skincare:
| What you bought | Price | Package | Ounces | Cost per ounce | Cost per gram or ml |
|---|---|---|---|---|---|
| Soy wax, case | $110.00 | 50 lb | 800 | $0.1375 | $0.0049 |
| Fragrance oil, bottle | $28.00 | 16 oz | 16 | $1.7500 | $0.0617 |
| Coconut oil, jug | $24.00 | 7 lb net weight | 112 | $0.2143 | $0.0076 |
| Shea butter | $16.00 | 1 kg | 35.27 | $0.4536 | $0.0160 |
| Sea salt, bag | $45.00 | 25 lb | 400 | $0.1125 | $0.0040 |
| Vanilla extract | $38.00 | 32 fl oz | 32 fl oz | $1.1875 | $0.0402 a ml |
| Aloe vera juice | $22.00 | 1 gal | 128 fl oz | $0.1719 | $0.0058 a ml |
Per gram is the same calculation in smaller units, and easier for the small amounts in a recipe: 20 g of fragrance oil at 6.17 cents a gram is $1.23. How to build those per-gram costs into a recipe is in steps in recipe costing.
Ounces and fluid ounces aren't the same
An ounce measures weight; a fluid ounce measures volume. They're equal only for water and things as dense as water. Oils are lighter: a fluid ounce of coconut oil weighs less than an ounce. So the coconut oil above is costed from its net weight on the label, 7 lb, not from the size of the jug.
The rule that keeps the numbers honest: cost each ingredient in the same measure your recipe uses. If the recipe says grams, cost in grams. If an ingredient is sold by volume and used by weight, weigh a measured amount once, write down the weight, and convert from that. A scale is the most accurate tool in a small kitchen, and the one that makes recipe costs work; how to move a recipe from cups to grams is in scaling recipes for production.
A finished product's cost and price per ounce
The same formula works for what you sell. A 9 oz soy candle has $3.99 of wax, fragrance, wick, jar and label in it:
| 9 oz candle | |
|---|---|
| Materials and packaging | $3.99 |
| Net contents | 9 oz |
| Cost per ounce | $0.4433 |
| Price | $26.00 |
| Price per ounce | $2.8889 |
Price per ounce is how shoppers and shop buyers compare a 9 oz candle with a 12 oz one, or a 4 oz jar of salve with a 2 oz tin. If your price per ounce is far above similar products, the difference has to show in the product. The candle's full cost, with labor and overhead, is in how to price homemade candles, and packaging cost per unit is in packaging cost per unit.
Get the calculator
Download the cost per ounce calculator. Type what you bought, the price, the package size and its unit; it works out the ounces, the cost per ounce and the cost per gram or milliliter, keeping weight and volume apart. Below, a finished product's cost and price per ounce. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator is right for the price you typed. Then the next case of wax costs $118, the fragrance comes from a new supplier in 8 oz bottles, and the coconut oil goes up in a bigger jug. The cost per ounce in the recipe sheet is now three prices old, and every product made from those ingredients is costed at a price you no longer pay.
How TaroStack does it
TaroStack does the conversions for you and keeps every cost per unit current.
Every unit, converted. "Buy by the case, stock by the each, cook by the gram. TaroStack does the math." Each item is bought in its purchase unit, counted in its stock unit and used in its recipe unit, so a 50 lb case of wax becomes the ounces a candle uses without anyone dividing by 16.
Every cost, from what you paid. Receiving records what each delivery cost, freight included, and FIFO cost layers keep each lot at its own price. Batches are costed from those layers, so when the next case costs $118, the next batch's cost per candle shows it. A price-creep report per supplier shows who's raising prices.
And margins per product. Recording a batch divides its real cost by what came out good, and margins are reported by product and by customer, on what things actually cost.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| 50 lb case to ounces | Divide by hand | Converted, from the purchase unit |
| Weight or volume? | Easy to mix up | Each item has its own units |
| A new price | Retype the cost | The next delivery's cost, FIFO |
| Cost per candle now | Last price you typed | Every batch, at what you paid |
Recipes, unit conversion, batches and true cost are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.