#1 Each basket will contain the following items:

DVD $8.00

Pasta $2.00

Sauces $3.00

Cheeses $4.00

Pasta tongs $5.00

Wines $8.00

Baskets $4.00

Cellophane $1.00

Ribbons $1.00

1 gal. of gas $4.00

I can make 20 gift baskets. I estimate my fixed costs to include the salary I want to achieve $200 and the utilities that I may use to produce these which is around $25.

If I want to realize a 25% return on sales, where should I price my product for the holiday season?

Answering the question: What percent of each dollar sales = profit? A 20% return on sales means that for every $1.00 of sales you created, 20 cents of it was profit.

#2 For the holiday season, I plan to make and sell a game. Each game will need:

Piping $15.00

Golf balls $6.00

Cords $2.00

The plan is to sell each of these games for $38. I can make 40 games before the holidays. My only fixed costs will be a salary I hope to make of $200.00. Calculate my return on sales on this effort: Using the same formula, but you are solving for the actual percentage return on sales.

?% = Total Revenue Total Cost

Total Revenue