1. Buy or bake the cookies
Economics simplified

2. To estimate the value of the product manufactured many parts of economics must be considered.
land and building cost
equipment cost
construction cost
materials cost
labor cost
energy cost
taxes, interest and depreciation

3. For our simple case the minimum information required is
material cost
energy cost
labor cost

4. Material costs Material Cost/unit Flour $ 1.79/5 lbs bag
Bicarbonate of soda $ 0.49/16 oz box
Salt $ 0.49/1 lb 10 oz box
Margarine $ 0.99/1 lb tub
Sugar $ 1.99/5 lbs bag
Brown sugar $ 0.79/1 lb box
Vanilla extract $ 1.79/1 fl oz bottle
Eggs $ 1,19/dozen (medium)
Chocolate chips $ 2.59/11.5 oz bag
Ground walnuts $ 2.99/9 oz bag

5. Energy and labor costs
Although baking cookies is a labor of love, we must assign a value to it. In this case we will use the minimum wage of $7.25/h.
For energy cost we use the average residential electricity rate in NJ of $0.12/kWh

6. Cost estimate (materials)
Material Amount used Cost/batch
Flour g $ 0.42
Bicarbonate of soda g $ 0.01
Salt g $ 0.01
Margarine g $ 0.51
Sugar g $ 0.16
Brown sugar g $ 0.31
Vanilla extract cm3 $ 0.30
Eggs each $ 0.20
Chocolate chips g $ 3.75
Ground walnuts g $ 2.76
Total material cost $8.42/batch

7. Cost estimate (energy)
The cookies are baked in a 2500 W home electric oven for ~30 minutes.
Energy cost = 2.5 kW x 0.5 h x $0.12/kWh = $0.15/batch of cookies

8. Cost estimate (labor) Task Time used % work/time Chargeable time
Preparation h h
Baking h h
Total h h
Labor cost = $7.25/h x 0.75 h = $5.44/ batch of cookies

9. Cost estimate (total) Total cost/ batch of cookies = $ 13.86
There are 20 cookies/batch
Cost of one of our delicious cookies is
~ $ 0.69

10. Commercial product price
For 1 pound of similar size and quality cookies (14-15 pieces) from several local bakeries the price ranged between $14.00 and $15.00.
The cost of a commercial cookie is
~$ 0.95