Understanding Costs and Profits
Young Entrepreneurs: Business Basics Year 1 Business Learning Lesson 2 of 5
What Are Business Costs?
Money we spend to make our product Materials like paper, glue, stickers Everything we need costs money We must count all our costs
Let's Count Our Materials!
Count 5 stickers Count 3 pieces of paper Count 1 bottle of glue Add up all the costs
Materials and Their Costs
{"left":"1 sticker = 10 cents\n1 piece of paper = 20 cents\n1 bottle of glue = 50 cents","right":"5 stickers = 50 cents\n3 pieces of paper = 60 cents\nTotal materials cost = $1.60"}
Making Our Product
Use our counted materials Make a beautiful bookmark Keep track of what we use Our product is almost ready!
How Much Should We Sell It For?
Our costs were $1.60 Should we sell for $1.60? What if we sell for $2.00? Will we make money or lose money?
Understanding Profit
Profit = Selling Price - Costs If we sell for $2.00 and costs are $1.60 Our profit = $2.00 - $1.60 = 40 cents Profit helps our business grow!
Remember This!
Understanding costs and profits helps us make smart business decisions and know if our business is successful!