The Margin Computed From The Wrong Cost
A clean-looking margin figure, built on a cost base that excluded two real components.
A margin was calculated and presented with normal confidence. The cost base it used excluded two real components, so the figure was wrong by enough to flip the conclusion. Nothing in the output distinguished it from a correct calculation, and it was caught by a human who happened to know the number should be lower.
Symptom
A margin figure was produced, formatted cleanly and presented as part of a recommendation. It was wrong — the cost base used to compute it omitted components that were real, known and available in a different source.
The error was large enough to change the recommendation. It was caught by a person who happened to know roughly what the number should be.
Root cause
Two failures stacked.
The cost base was assembled from the source that was easiest to reach, which held one kind of cost, rather than from the set of sources that together hold all of them. Nothing in the easy source announced that it was partial.
The output carried no provenance. A margin is a derived number, and a derived number presented without its inputs cannot be checked without redoing the work. The reader sees a percentage, not a calculation, so the only available check is intuition — which is exactly what caught it, and only because the reader had it.
A related case in the same period omitted a regulatory duty from a landed cost. Same shape: a real cost component that lives outside the obvious source, silently excluded.
Cost
No decision was taken on the wrong figure, so the direct cost was zero. The instructive part is the detection path: the only thing standing between the error and a decision was one person's memory of what the number should be.
That is not a control. It works until the reader is unfamiliar with the specific number, which is precisely when a calculation is most needed.
Fix
Derived numbers now carry their inputs:
margin 29% = (price 100 − cost 71) / price · cost = purchase 62 + freight 6 + duty 3 · sources: [a], [b]The formula is not for the reader who trusts it. It is for the reader who does not, and it converts an act of faith into a 10-second check.
Prevention
A derived number without its inputs is an assertion. Publish the components or expect the result to be believed for the wrong reasons.
Enumerate the cost components once, as a checklist, and check the list rather than the source. The failure was not a bad source, it was assuming one source was complete — and a checklist survives that assumption where a query does not.
Treat a number produced by a sub-agent as unverified until traced. Delegation moves the work, not the responsibility, and a confident sub-agent produces confident-looking output regardless of whether its inputs were complete.
$ head -12 the-margin-from-the-wrong-cost.md
$ cite the-margin-from-the-wrong-cost
Citation id SV-4132 is stable. It resolves at
https://stillvalid.dev/c/SV-4132 even if this artifact moves to another section,
which a bare URL does not survive. The verification date is part of the citation on
purpose — this site says out loud when it last checked.
[The Margin Computed From The Wrong Cost](https://stillvalid.dev/failures/the-margin-from-the-wrong-cost) — stillvalid, SV-4132 (failure, verified 2026-08-14)