Pricing So the Numbers Work · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.

Price it so the numbers work

Life Skills · Entrepreneurship · ages 12-13
Name ______________________   Date ____________

  1. A $100 stall fee is your only fixed cost. Each wristband sale leaves a $2 margin after its unit costs. How many wristbands must sell to cover all costs?

    Answer: ______________

  2. Each cookie costs $2 to make and sells for $5. What is the margin on one cookie?

    • $7
    • $3
    • $2

  3. What does break-even mean?

    • Profit is exactly zero
    • Every item has sold out
    • Price only covers advertising

  4. For each wristband, string costs $1, a clasp $2, packaging $1 and paid making time $2. A $30 stall fee stays the same however many sell. What is the unit cost?

    • $4, leaving out paid making time
    • $36, adding the entire stall fee
    • $6, counting all per-item costs

  5. Lemonade costs $1 per cup and sells for $3. A $65 stand fee is the only fixed cost. You sell whole cups and have no other costs. What is the smallest number of cups you must sell to cover all costs?

    Answer: ______________

  6. For a seller offering only one product, selling more units at a price below unit cost can cover a fixed stall fee.

    Circle one:   True   False

  7. Ali and Ben each pay an $80 stall fee. Ali's price is $6 and his unit cost is $2. Ben's price is $5 and his unit cost is $4. These are their only costs. How many fewer sales does Ali need than Ben to cover all costs?

    • 60 fewer sales
    • 40 fewer sales
    • 20 fewer sales

  8. Wristbands sell for $5, cost $3 each and cover an $84 fixed fee at 42 sales. You cut the price to $4. Unit cost and the fee stay unchanged, with no other costs. What happens to the sales count needed to cover costs?

    • It stays at 42 wristbands sold
    • It falls to 21 wristbands sold
    • It rises to 84 wristbands
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Answer key

For grown-ups. Fold this page away before handing over the rest.

Price it so the numbers work W1-mt_m4DGdFIm5h-s1

  1. 50 · Each sale contributes $2 toward the $100 fee. Divide 100 by 2 to get 50 wristbands.
  2. $3 · Subtract the $2 unit cost from the $5 price. The $3 margin goes toward fixed costs before it becomes profit.
  3. Profit is exactly zero · At break-even, revenue equals total costs. Subtracting total costs from revenue leaves zero profit.
  4. $6, counting all per-item costs · Add the costs that come with each wristband: $1 + $2 + $1 + $2 = $6. Keep the fixed $30 stall fee separate.
  5. 33 · The margin is $2 per cup. $65 divided by $2 is 32.5. Round up to 33 cups: their $66 margin covers the fee, while 32 cups leave only $64.
  6. False · False. Each sale adds a loss rather than money toward the fee. More sales of that product add more losses.
  7. 60 fewer sales · Ali's margin is $4, so he needs 80 divided by 4, or 20 sales. Ben's margin is $1, so he needs 80 sales. Subtract: 80 minus 20 is 60 fewer sales for Ali.
  8. It rises to 84 wristbands · The new margin is $4 minus $3, or $1. Dividing the $84 fee by $1 gives 84 sales, double the previous 42.
Worksheet · LightMySky