Congratulations!

You have been hired as the new pricing manager for the very successful line of florists, Viki$$s Flower Shoppe. Viki$$s sells the usual assortment of flowers, plus small gifts.

Your first task is to analyze the pricing structure for a new flower arrangement that Viki$$s hopes will be a best seller.

The flowers cost the store $$9$ for each arrangement.

$*$ The vase costs $$7.$

$*$ 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 $20\%.$

Calculate the unit cost and the minimal cost$-$based price for each arrangement based on this projected sales figure.

Unit costs $($UC$)=$ VC $+$ FC $/$ Sales units $=$

Markup Price $=$ UC $/(1-$Mark$-$Up $\%)=$

Estimate the Break$-$even point $($in units and $$)$ for this price

Breakeven $=$ FC $/($Price $-$ VC$)=$

Estimate the revenue and profit realized at the end of the year

Revenue $=$ Price $*$ Sales units $=$

Profit $=($Price $$ UC$)*$ Sales units $=$

Next month, Viki decided to change the price to $$59\mathrm{.}99$ and managed to sell $260$ flower arrangements

Pricing problems Part $2$:

Calculate Vicky$$s revenue and profit in the second month

Revenue $=$ Price $*$ Sales units $=$

Profit $=($Price $$ UC$)*$ Sales units $=$

$5.$ Calculate the price elasticity for their flower arrangements.

Elasticity $=((($Sales $2-$ Sales $1)/$ Sales $1)/($Price$2-$ Price $1)/$ Price $1))=$

$6.$ How would the sales volume, revenue, and profit change if they decided to increase the price to $64\mathrm{.}99?$

From $5,$ Change in Sales $=$ Change in Price $*$Elasticity$,$ from there you can calculate sales in month $3,$ revenue and profit