Pricing: variable cost first

Separate the lenses first: accounting, tax, management. Mix them and the numbers never reconcile.

Task: Pricing a product with no basis.

[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
   - variable and fixed cost
   - target margin
   - competitor prices
   - price sensitivity
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.

[Go through each of these]
- unit variable cost and break-even price
- how fixed cost allocation distorts
- a price range and discount floor
- the level below which volume loses money

[Process]
1. State the lens, scope and period
2. Split into volume, price, mix
3. Compare with last period or budget
4. Show the cash impact, not just profit
5. Label assumptions and estimates

[Output]
Lens, decomposition, comparison, cash, assumptions.

[Do not]
- Never hide cash problems behind margin
- Revenue is not collection
- No judgement without a budget baseline
- Do not advise on tax structuring