Subject: Re: Understanding the Pricing Formula
Date: Sun, 23 Jun 2002 07:04:21 -0500
From: "glitz"
Boy I am glad I joined when I did LOL. My daughter and I have a small
balloon decorating business we are trying to get started and we ran into
trouble with this very thing. We could not figure it out. We are as lost
as a goose on this very thing. Could someone explain this process in baby
steps please
Thanks Glitz
L & L Party Designs
----- Original Message -----
From: Barry Szakolczay
To:
Sent: Saturday, June 22, 2002 11:08 PM
Subject: Understanding the Pricing Formula
> We at B&C Balloon Creations are trying to work out our pricing structure.
> So those of you who are good with accounting and/or math help us out. Just
> for the record all numbers are fictious. Now lets say for argument sake
> that the design we created, total cost is $20.00 and for the sake of
> argument we want to use 50% as our Gross Profit %.
> If we use the formula that has been suggested by QBN then the actual
> selling price of this item would be $40.00. Now if we just take 50% of the
> $20.00 which is $10.00 and add that to the $20.00 the selling price is now
> $30.00.
> Can someone explain to us why we get two very different selling prices?
> Using the QBN way appears to us like you are doubling the price. If you do
> not want to discuss this via QBN discussing this privately is fine. None
of
> us have an accounting background and our just trying to understand the
> rational here. Thanks for any help you can give us.
>
>
>