HP 10bII+ Financial qJ1\q GaJ4, Additional Examples, Business Applications, Setting a Sales Price

13 Additional Examples

Business Applications

Setting a Sales Price

One method for setting the per unit sales price is to determine the cost of production per unit, and then multiply by the desired rate of return. For this method to be accurate, you must identify all costs associated with the product.

The following equation calculates unit price based on total cost and rate of return: PRICE = TOTAL COST ÷ NUMBER OF UNITS × (1 + (%RTN ÷ 100))

Example

To produce 2,000 units, your cost is 40,000. You want a 20% rate of return. What price should you charge per unit?

Table 13-1 Calculating the price charged per unit

Keys	Display	Description
Y:::::a	40,000.00	Enters cost.
G:::P	20.00	Calculates unit cost.

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G:aJ::4

24.00Calculates the unit sales price.

Forecasting Based on History

One method of forecasting sales, manufacturing rates, or expenses is reviewing historical trends. Once you have historical data, the data are fit to a curve that has time on the x-axis and quantity on the y-axis.

Example

Given the following sales data, what are the sales estimates for years six and seven?

Table 13-2 Sales data

Year	Sales
1	10,000
2	11,210
3	13,060
4	16,075
5	20,590

Additional Examples 137