Selling Price In order to make money by selling a product, you need to sell it for more than it costs. How do you determine how much to charge for a product?

Lesson Objective Find the net profit as a percent of the selling price. Content Vocabulary net-profit rate The net profit on an item expressed as a percent of the selling price.

Giant Discounts sells a vacuum cleaner for $ The cost of the vacuum cleaner to Giant Discounts is $ Giant estimates the overhead expenses on the vacuum to be 30 percent of the selling price. What is the net-profit rate based on the selling price of the vacuum cleaner? Example 1

Find the net profit. Markup – Overhead ($49.99 – $23.74) – ($49.99 × 30%) $26.25 – $15.00 = $11.25 Example 1 Answer: Step 1

Find the net-profit rate. Net Profit ÷ Selling Price $11.25 ÷ $49.99 = or 22.5% Example 1 Answer: Step 2

A doll costs the Toy Store $7.85. The doll has a selling price of $ The store estimates overhead at 28 percent of the selling price. Find the net-profit rate based on the selling price. Example 2

Find the net profit. Markup – Overhead ($16.96 – $7.85) – ($16.96 × 28%) $9.11 – $4.75 = $4.36 Example 2 Answer: Step 1

Find the net-profit rate. Net Profit ÷ Selling Price $4.36 ÷ $16.96 = or 25.7% Example 2 Answer: Step 2

Find the markup, overhead, net profit, and net-profit rate. Selling price: $41.25 Cost: $23.25 Overhead expense: 25 percent of selling price Practice 1

Markup: $18 Overhead: $10.31 Net profit: $7.69 Net-profit rate: 19% Practice 1 Answer

Find the markup, overhead, net profit, and net-profit rate. Selling price: $ Cost: $ Overhead expense: 45 percent of selling price Practice 2

Markup: $ Overhead: $ Net profit: $47.35 Net-profit rate: 10% Practice 2 Answer