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A . Selling Cookies using Cost - Based Pricing You have decided that you want to put your entrepreneurial spirit to use and are going

A. Selling Cookies using Cost-Based Pricing
You have decided that you want to put your entrepreneurial spirit to use and are going to start a
business at Foothill selling chocolate chip cookies. You know that students at Foothill love chocolate
chip cookies, and you love baking them! You decide to apply the cost-based pricing method in order to
determine the price of your product.
Here are some basic facts:
You want to sell 6 cookies in beautiful recycled paper boxes wrapped in a colorful bow.
Ingredients for the cookies -- including their purchase price -- are listed as follows:
1 box of cookie mix costs $6 and is enough for 4 dozen cookies
1 bag of chocolate chips costs $4.50 and is enough for 4 dozen cookies
1 small bottle of cinnamon (your secret ingredient) costs $10 and is enough for 12 dozen cookies
1 carton of a dozen eggs costs $3.2 eggs are needed per box of cookie mix
You can buy a pack of paper boxes that fit 6 cookies at the cost of 20 boxes for $4
Question 1:
(A) What is the cost for the amount of egg used in one cookie
(B) What is the unit cost of one cookie?
(C) What is the unit cost of one paper box?
(D) Ignoring all other costs, what price should you charge if you want to make a 30% markup on each
box of 6 cookies?
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