Lemonade Stand Calculator
From cups sold, price, variable cost per cup and fixed cost, compute revenue, total cost and profit.
Input Data
Results
At a glance:The Lemonade Stand calculator, from cups sold, price, variable cost per cup and fixed cost, computes revenue, total cost and profit: revenue = cups × price; total cost = cups × variable cost + fixed cost; profit = revenue − cost. It builds the concepts of variable cost, fixed cost, contribution margin and break-even that apply to any business.
Formula
Revenue = cups sold × price per cup.
Total cost = cups sold × variable cost per cup + fixed cost.
Profit = revenue − total cost.
$$Revenue = Cups \times Price,\quad Cost = Cups \times VC + FC$$$$Profit = Revenue - Cost,\quad BreakEven = \dfrac{FC}{Price - VC}$$How to Use
- Enter expected cups sold and price per cup.
- Enter the variable cost per cup and total fixed cost.
- View revenue, total cost and profit.
Price HK$5, variable cost HK$2, fixed cost HK$100 — revenue, cost and profit by cups sold
| Cups sold | Revenue | Total cost | Profit |
|---|---|---|---|
| 0 | 0 | 100 | −100 |
| 34 (break-even) | 170 | 168 | 2 |
| 50 | 250 | 200 | 50 |
| 100 | 500 | 300 | 200 |
| 200 | 1,000 | 500 | 500 |
Case Studies
Case 1: Revenue, cost and profit at default
A child's stand: 100 cups, HK$5 each, variable HK$2 (lemon, sugar, cup), fixed HK$100 (rent, sign).
Revenue = 100 × 5 = HK$500; total cost = 100 × 2 + 100 = HK$300; profit = 200.
That HK$200 is the day's reward. To know the minimum cups to avoid loss: break-even = 100 ÷ (5 − 2) ≈ 34 cups — from cup 34 you start profiting, netting HK$3 each after.
Case 2: Raise price, sell fewer — profit or loss?
Same stand (variable HK$2, fixed HK$100). Plan A: price HK$5, 100 cups. Plan B: raise to HK$6, sell 80 cups.
Plan A: revenue 500, cost 300, profit HK$200. Plan B: revenue = 6 × 80 = 480, cost = 2 × 80 + 100 = 260, profit = HK$220.
Raising price earns HK$20 more despite 20 fewer cups, because contribution rose from HK$3 to HK$4 and fewer cups saved variable cost. But if price hikes crash volume (e.g. 50 cups), profit = 4 × 50 − 100 = HK$100, less. The key is demand sensitivity; test price-volume pairs to find the best price.
FAQ
Variable vs fixed cost?
Variable cost changes with volume — each extra cup costs lemons, sugar and a cup; total variable = variable per cup × cups. Fixed cost is paid regardless — rent, sign, even at zero sales. This split determines 'how much each extra cup earns' (price − variable = unit contribution) and 'how many cups to break even'. Learn it here, apply to any business.
How many cups to break even?
Break-even is the zero-profit volume: unit contribution = price − variable; break-even cups = fixed cost ÷ contribution. Default: 5 − 2 = 3; fixed 100; break-even = 100 ÷ 3 ≈ 34 cups. Try different volumes in this tool to see profit turn positive and assess feasibility.
Why is this example worth learning?
It is the classic entry model for business concepts — it shows 'profit = revenue − cost' and the key variables (price, volume, variable, fixed), builds intuition (price up may cut volume; lower variable raises contribution; higher fixed needs more volume), and bridges to break-even, contribution margin, pricing and scale. Simple and universal, it makes abstract finance tangible — great for teaching kids or first-time founders.
If I raise price but sell fewer, profit or loss?
The pricing dilemma: higher price lifts per-cup profit but may cut volume; the net depends on both. Default (variable HK$2, fixed HK$100): price 5, 100 cups → profit 200. Raise to 6, sell 80 → profit 220 (more, because contribution rose and fewer cups saved variable cost). But if volume crashes (50 cups), profit = 100, less. Depends on demand elasticity — inelastic demand makes a hike pay; elastic demand may backfire. Test price-volume pairs here to maximise profit.
Which threatens profit more, fixed or variable cost?
They hurt differently. Fixed cost is deadliest at low volume — paid regardless, so the fewer cups, the heavier it sits per cup; below break-even it directly causes loss, but beyond it gets diluted (scale effect). Variable cost eats each cup's contribution — higher variable means smaller contribution, needing more cups to break even and slower profit. If variable rises HK$2 → HK$3, contribution 3 → 2, break-even 34 → 50 cups. So: high fixed → grow volume to dilute it; high variable → raise per-cup efficiency (price, cheaper input, less waste). Real businesses face both; this model lets you rehearse the trade-offs safely.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.