What Is a Unit of Sale? A unit of sale is what a customer actually buys from you. It’s also the amount of product (or service) you use to figure your operations and profit. The unit of sale is the basic building block of your business.

Student Group Creation 1. Introduce the group ideas and people who created them. 2. Allow them to explain their ideas. 3. Groups will have 4 members (2 will have 5) 4. Once in groups, wait for further instructions!

Identifying Expenses Practice 1

Start-up Expenses Variable Expenses Fixed Expenses

Start-up Expenses Variable Expenses Fixed Expenses

Variable Expenses A variable expense is an expense that changes based on the amount of product or service a business sells. The two types of variable expenses are: Cost of Goods Sold (COGS). For manufacturing and merchandising (retailing and wholesaling) businesses, the variable expense that is associated with each unit of sale is called the cost of goods sold. Other Variable Expenses. These can include such expenses as commissions for salespeople, shipping and handling charges, or packaging.

The Economics of One Unit of Sale Selling Price – Expenses = Profit (or Loss) To calculate the economics of one unit of sale, subtract the variable expenses for a unit from the unit’s selling price. The result is the contribution margin. This is the amount per unit that a product contributes toward the company’s profitability before the fixed expenses are subtracted. Selling Price – Variable Expenses = Contribution Margin

Create a Group Banner/Poster Your team will create a poster or banner. It will include the following: Business Name Group Members Name A big space for a Logo (does not have to be created now) See Example

Selling Price Per Unit Variable Expenses Per Unit Costs of Goods Sold Materials Labor Total COGS Other Variable Expenses Commision Packaging Other Total Other Variable Expenses Total Variable Expenses Contribution Margin Per Unit

Selling Price Per Unit Variable Expenses Per Unit Costs of Goods Sold Materials Labor Total COGS Other Variable Expenses Commision Packaging Other Total Other Variable Expenses Total Variable Expenses Contribution Margin Per Unit

EOU for a Manufacturing Business Section 10.2: The Economics of One Unit of Sale

EOU for a Wholesale Business Section 10.2: The Economics of One Unit of Sale

EOU for a Retail Business Section 10.2: The Economics of One Unit of Sale

EOU for a Business Selling More Than One Product Section 10.2: The Economics of One Unit of Sale

EOU for a Service Business Section 10.2: The Economics of One Unit of Sale