Costs of Running A Business Marketing/Entrepreneurship

What is a better deal?  A 10oz Candy Bar for $1.00 or a 5oz candy bar for $0.60?  A 10 piece chicken bucket for $8 or a 20 piece chicken bucket for $15?  A 12 flower bouquet for $6 or a 20 flower bouquet for $9?

Unit of Sale  Define the Unit of Sale for the following businesses:  Pizza Parlor  Barbara Shop  Computer Store  Starbucks  $1 Store

Costs  Variable Costs: Change with Sales. Occur in 2 sub-categories  COGS – specific to each unit of sale  Cost of materials  Cost of Labor  Other variable costs  Commissions  Shipping & Handling

Calculating Gross Profit  Selling Price – COGS – Other Variable Costs = Gross Profit

Try This  Find the Gross Profit per Unit.  Sales Price = $10.00  COGS = $36 for a Dozen Watches  Commission = 20%

Economics of One Unit For Watches  Selling Price $10.00  Cost of Goods Sold$3.00  Other Variable (Commission)$2.00  Total Variable Costs Per Unit: $5.00  Gross Profit Per Unit: $5.00

Try This  Individually, try the example for the Sandwiches.  Page 121