# Marketing Essentials

## Chapter 27: Pricing Math

### Figures Online Action

Figure 27.1

Candy Store Profit
As manager of the Cavalier Candy Shop, you’re putting together a price list for your store’s homemade confectionery. These are the items you’re offering, followed by the cost of the materials involved in making each piece:

• English toffee, \$0.12
• Caramel, \$0.05
• Chocolate-covered raspberries, \$0.35
• Chocolate-covered strawberries, \$0.25
You sell these items for \$1.25, \$0.75, \$1.70, and \$2.50 respectively.

Activity
If you sell 1,000 of each item in a given month, and have fixed expenses for that month of \$3,000, what would your net profit be?

Figure 27.2

Candy Store Markup
At the Cavalier Candy Shop, you offer a few products that you purchase from a wholesaler. They include:

• Candied cherries (wholesale cost: \$1.20 per package)
• Chocolate golf balls (wholesale cost: \$0.35 a piece)
• Chocolate coins (wholesale cost: \$0.75 per bag)
• Candy straws (wholesale cost: \$1.25 per package)

Activity
Assuming you want to end up with a 40% markup on retail, what should your prices be for each of the items?

Figure 27.3

MP3 Markup
Visit a local electronics store and conduct research about MP3 on the Internet. Notes the different prices.

Activity
What would the retail price be for a portable MP3 player that costs \$75 to manufacture and that has a 25% markup on retail?