Additional Examples
137
13 Additional Examples
Business Applications
Setting a Sales Price
One method for setting the per unit sales price is to determine the cost of production per unit,
and then multiply by the desired rate of return. For this method to be accurate, you must
identify all costs associated with the product.
The following equation calculates unit price based on total cost and rate of return:
PRICE = TOTAL COST ÷ NUMBER OF UNITS × (1 + (%RTN ÷ 100))
Example
To produce 2,000 units, your cost is 40,000. You want a 20% rate of return. What price
should you charge per unit?
Forecasting Based on History
One method of forecasting sales, manufacturing rates, or expenses is reviewing historical
trends. Once you have historical data, the data are fit to a curve that has time on the x-axis
and quantity on the y-axis.
Example
Given the following sales data, what are the sales estimates for years six and seven?
Table 13-1 Calculating the price charged per unit
Keys Display Description
Y:::::a
40,000.00 Enters cost.
G:::P
20.00 Calculates unit cost.
\qJ1\q
G:aJ::4
24.00 Calculates the unit sales price.
Table 13-2 Sales data
Year Sales
110,000
211,210
313,060
416,075
5 20,590
To Next Page
Loading...
Need help?
General
Weight and Dimensions
