CORNELL NOTES
EQ: what factors must i consider when selling a good or service?
LT: I will assess Cost of Goods to determine price for a product
Assessment: Run a Digital Lemonade Stand and log sales + Inventory
VOCABULARY:
Profit Revenue Inventory Cost of Goods (COGS) Supply and Demand. Vertical Divider
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NOTESBefore you start a business you have to think about a few key things. These things will determine whether or not you make a profit.
Profit is defined as a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something. Before we get to making profit we have to find out the value of what we are selling. If you are selling a product or service you will have pay to the creation of the product or the operation of the service. This is called COST OF GOODS SOLD or COGS. Once you have determined what your material costs will be to make the product then you have to come up with a price for the product. PRICE is the cost you will ask customers to pay for your goods or service. Your price should include your COGS plus profit. It can be determined by looking at your competition and trying to match or lower their prices. You can also decide the price based on what you think customers will be willing to pay or on the value you think they will place on your product or service. In the end your prices will increase your revenue or income. This is the money that is coming into the business that allows you to pay off bills and hopefully will lead to increase in profit. |
Activity 1: In this activity, you will each set up and run your own business—a lemonade stand. You will make all the business decisions about materials, costs, and how to make the lemonade. You will run the lemonade stand, record your data, and then analyze how much money you made or lost.
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lemonade_stand.docx | |
File Size: | 80 kb |
File Type: | docx |