<p>Name: Contact Info: Date:</p><p>Lesson Title : Experiencing a Small Business Unit #: Lesson #: Activity #: Worksheet: Activity Title: Write a Business Plan 1 2 1 3 Worksheet Title: Calculating Your Product Price</p><p>Calculating Your Product Price Your business is going to sell a product, and just like any store or business, you’re going to apply price markups and markdowns in order to gain a profit and incite customers to buy. First, let’s look at a couple of situations: </p><p>A. Janay’s Jellies and Jams pays $44 to create a pack of 8 jars of Silly Strawberry Jam. </p><p> a. What is the unit price?</p><p> b. If they want to sell each jar for $8.25, what percent markup would they be placing on each jar?</p><p> c. Compare the total price of marking up each individual jar in an 8-pack by 40% then adding the prices up, and the total price of marking up the whole $44 pack by 40% at once. What do you notice? Why do you think this is?</p><p>B. Hank’s Tanks sells gas tanks to fueling stations around Cincinnati. Each one costs Hank $950.</p><p> a. Hank wants to make a 50% profit on the tanks. What should his selling price be before tax?</p><p> b. During these tough economic times, Hank realizes that in order to get his customers to buy, he’s going to need to reduce the price. Take Hank’s price that you calculated from above and 1 mark it down by 20%. What is the reduced price? Is this the same price that it would have been if Hank had just marked his original price up by 30%? Explain with mathematical proof.</p><p>Now you can figure out your own product’s price. </p><p>Step 1) Start by figuring out the cost of making ONE of your product (just the materials cost; if no “employees” are being paid for manufacturing). If you need more room for your list of materials, attach a separate sheet of paper.</p><p>Material</p><p>Cost/Tota l Quantity Cost per Unit</p><p>Labor + Labor Cost Time (in Hours) to Labor per Hour Make One Unit cost per Unit</p><p>= Total Cost per Unit</p><p>Step 2) a) In order to keep the prices low for our community but still try to make a profit, we’re going to put only a 30% markup on our products. How much is 30% of your product cost?</p><p>30% of ______= ______b) Add the product price and the markup cost to get your base selling price.</p><p>Base price: ______</p><p>Step 3) 2 a) To make it more convenient for you and your customers, you decide to include tax in the price. How much is 6.5% of your base price?</p><p>Tax on base price:______</p><p> b) What is the total selling price including tax?</p><p>Total with tax: ______</p><p>Step 4) Finally, we’re going to make the pricing even easier to deal with by not worrying about coins. To do this without messing with profits, let’s round the total with tax up to the next whole dollar. This will be your FINAL PRICE.</p><p>Rounded FINAL price: ______</p><p>3</p>