Part I.

Cost-Based Pricing of Macadamia Nuts

You love macadamia nuts and want to sell them on-campus in nice 6 oz packages

• You can buy a 114 lb sack of Macadamia nuts for $608.
• You can buy nice 6 oz packages in bundles of 500 for $50

1. Ignoring other costs, what price should you charge if you want to make a 40% profit on each package?
2. You want to make $1280 total profit when you sell out your 114 lbs of Macadamias. Assuming the same unit cost, what price should you charge?

Part II.

You have discovered the unique pili nut and want to sell it on-campus in nice 5 oz packages

• Market research on-campus shows that Foothill Students would be willing to pay $15 for a 5 oz. bag of pili nuts.
• You can buy nice 5 oz packages in bundles of 40 for $20

Ignoring other costs, and assuming you want to make 100% profit, what is the maximum you will be willing to pay for pili nuts per ounce?