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7. Markup Pricing using Jeans as an example. You own a jeans manufacturing business and need to determine the retail selling price for your jeans.
7. Markup Pricing using Jeans as an example. You own a jeans manufacturing business and need to determine the retail selling price for your jeans. Fill in all of the blanks to determine your selling price on cost and/or on selling price. Refer to your formula shect to solve. Step 1: Determine Costs la. Determine Total Fixed costs Management and other nonproduction-related salaries Rental of factory Insurance Depreciation on equipment Advertising S...750.000 600,000 50.000 100,000 500.000 Total Fixed Costs S 1.b. Determine Fixed Costs per unit Number of units produced = 400,000 1.c. Determine Variable costs per unit Cost of materials, (fabric, zippers, thread, etc) Cost of Production labor Cost of utilities, and supplies used in production process 10.00 3.00 1.d. Variable Cost per unit S 1.c. Total Cost per unit 1.8 Total cost for producing 400,000 units Step 2: Determine markup and selling price Refer formula sheet in the markup section Manufacturer's selling price to the retailer assuming a 20% markup on cost s Retailer's selling price assuming 40% markup on selling price (Retailer's cost is the manufacture's selling price you calculated above- This is also what the consumer pays for the item - it is the retail selling Price) Alternative Retailer's selling price assuming a 40% markup on cost $
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