Return on Sales Problems For the holiday season, I plan to create and sell "dinner and a movie" gift baskets. Each basket will contain the following items: I believe I can reasonably make 20 gift baskets. I estimate my fixed costs to include the salary I want to achieve $200 and the utilities that I may use to produce these which is around $25. If I want to realize a 25% return on sales, where should I price my product? For this problem, use the formula in CH14,inyourtextbook.Inthisproblem,weareusingthefundamentalprofitequation introduced in Chapter 13, however, the author introduces you to an important financial/marketing concept, Return on Sales. We are answering the question: What percent of each sales dollar = profit? A 20% return on sales means that for every $1.00 of sales you created, 20 cents of it was profit. That is a great return on sales. SOLUTION: 25%=TotalRevenueTotalRevenueTotalCost You are solving for a "Price" [P], one variable. You are given: variable costs, fixed costs, and ROS. For the holiday geason, I plan to make and sell an outdoor recreational game called "ladders". Each ladder game will require: The plan is to sell each of these games for $38. I believe I can reasonably make 40 games before the holidays. My only fixed costs will be a salary I hope to make of $200.00. What is my return on sales percentage? Calculate my return on sales on this effort? 7%=TotalRevenueTotalCogt Total Revenue SOLUTION: In this problem, you are solving for ROS (Return on Sales \%). You are given the price, variable costs, and fixed costs