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Lesson · Grade 6 · Applied Design, Skills and Technologies

Setting a Price: Profit or Break Even

  • Grade 6
  • Applied Design, Skills and Technologies
  • 1 min 15 s
  • British Columbia
  • BC6-AD-22

Using 20 handmade bracelets that cost $40 to make ($2 each), the video compares a money-out bar with a money-in bar at prices of $1, $2 and $3. These show a $20 loss, breaking even and a $20 profit. It then shows the choice between a business aiming for a profit to grow and a club just breaking even to keep prices low, notes that buyers must be willing to pay the price, and ends on the recap "Cover your costs to break even, go higher for profit."

Concept: Setting a price: making a profit or breaking even

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In one sentence

The question this lesson answers

How do you set a price for something you sell?

Say you make 20 bracelets to sell.

Transcript

What the lesson says

How do you set a price for something you sell?

Say you make 20 bracelets to sell.

The beads and string for all 20 cost 40 dollars.

40 dollars divided by 20 is 2 dollars for each bracelet.

If you sell all 20 at 1 dollar each, 20 dollars comes in.

Less money comes in than goes out, so you make a loss of 20 dollars.

Sell all 20 at 2 dollars each, and 40 dollars comes in.

Money in equals money out, so you break even.

Sell all 20 at 3 dollars each, and 60 dollars comes in.

More money comes in than goes out, so you make a profit of 20 dollars.

So you choose: do you want a profit, or just to break even?

A business usually aims for a profit, so it can grow.

A club might just break even, to keep its prices low.

Either way, buyers must be willing to pay the price you set.

Set a price that covers your costs to break even, or go higher for a profit.

Curriculum

Where this fits

British Columbia, Grade 6

Applied Design, Skills and Technologies, Entrepreneurship and marketing: pricing product/service, including decision to seek profit or break evenBC6-AD-22

Previous: What Makes a Brand: Name, Logo and Promise

British Columbia, Grade 7

Applied Design, Skills and Technologies, Entrepreneurship and marketing: pricing product/service, including decision to seek profit or break evenBC7-AD-20

Previous: Finding a Market Niche

This lesson is also listed in Grade 7.

The outcomes and strands follow the British Columbia curriculum.

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