\begin{tabular}{|c} \hline \\ \hline 1 \\ \hline 2 \\ \hline 3 \\ \hline 4 \\ \hline 5 \\ \hline 6 \\ \hline 7 \\ \hline 8 \\ \hline 9 \\ \hline 10 \\ \hline 1 \\ \hline 12 \\ \hline 13 \\ \hline 14 \\ \hline 15 \\ \hline 16 \\ \hline 17 \\ \hline 18 \\ \hline 19 \\ \hline 20 \\ \hline 21 \\ \hline 22 \\ \hline 23 \\ \hline 24 \\ \hline 25 \\ 26 \\ \hline 27 \\ \hline 28 \\ \hline 30 \\ \hline 31 \end{tabular} Viki's Flower Shoppe sells flowers and small gifts. * The flowers cost the store $9 for each arrangement. * The vase costs $6. * The florists are paid $32/hr while a florist can create 4 arrangements per hour. * Rent for the store and other overhead expenses total $6000 per month. * Based on the store location, Viki expects to sell 300 arrangements next month. * They would like to achieve a return on sales / profit margin of 20%. Pricing problems Part 1: 1. Calculate the unit cost 2. Recommend a cost-based price 3. Estimate the monthly revenue and profit Next month, Viki decided to change the price to $59.99 and managed to sell 260 flower arrangements Pricing problems Part 2 : Pricing Exercise 4. Calculate Vicky's revenue and profit in the second month. 5. Calculate the price elasticity for their flower arrangements. 6. How would the sales volume, revenue and profit change if they decided to increase the price to 64.99 ? \begin{tabular}{|c} \hline \\ \hline 1 \\ \hline 2 \\ \hline 3 \\ \hline 4 \\ \hline 5 \\ \hline 6 \\ \hline 7 \\ \hline 8 \\ \hline 9 \\ \hline 10 \\ \hline 1 \\ \hline 12 \\ \hline 13 \\ \hline 14 \\ \hline 15 \\ \hline 16 \\ \hline 17 \\ \hline 18 \\ \hline 19 \\ \hline 20 \\ \hline 21 \\ \hline 22 \\ \hline 23 \\ \hline 24 \\ \hline 25 \\ 26 \\ \hline 27 \\ \hline 28 \\ \hline 30 \\ \hline 31 \end{tabular} Viki's Flower Shoppe sells flowers and small gifts. * The flowers cost the store $9 for each arrangement. * The vase costs $6. * The florists are paid $32/hr while a florist can create 4 arrangements per hour. * Rent for the store and other overhead expenses total $6000 per month. * Based on the store location, Viki expects to sell 300 arrangements next month. * They would like to achieve a return on sales / profit margin of 20%. Pricing problems Part 1: 1. Calculate the unit cost 2. Recommend a cost-based price 3. Estimate the monthly revenue and profit Next month, Viki decided to change the price to $59.99 and managed to sell 260 flower arrangements Pricing problems Part 2 : Pricing Exercise 4. Calculate Vicky's revenue and profit in the second month. 5. Calculate the price elasticity for their flower arrangements. 6. How would the sales volume, revenue and profit change if they decided to increase the price to 64.99
