Charge for your time! It feels kind of backwards for me to be talking about labor before I talk about the ingredients, the supplies and everything else. However, I really want to emphasize just how important it is to charge for your time! If you think about it, time is the absolute most valuable resource because once time is spent, you can't get it back.
Let's be real. You wouldn't work for free at your corporate job, right? So why would you work for free in your own business? I've seen folks do quick math in this industry and say, well, the box of cake mix is $2. The icing and packaging costs $5. So it only costs me $7 to make 24 cupcakes from one box. So if I sell them for $12, a dozen also known as a dollar per cupcake, then I'm making bank! Then, pile on what it feels like to have a flash sale and make a few hundred dollars at one time selling cupcakes for a dollar, then you can really feel good about yourself, right? Wrong. If you don't include your labor in this quick math, then you've already messed up.
So let's go back $2 for cake mix, $5 for icing and packing. Then it takes you two hours to prep, bake, package, and clean. If you charge $15 an hour, then your cost would actually be $37 for two dozen cupcakes, which is the same as $18.50 per dozen or $1.54 per cupcake.