Total Cost of Materials:

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1 Worksheet 1: Cost Inventors have to do more than just come up with brilliant ideas. They then need to take those ideas and implement them using available money, resources, and time. Now that you have created a product that solves a problem, you need to figure out how much it will cost to manufacture that product. 1. Write a brief description of the problem you are solving: 2. Write a brief description of your proposed solution: 3. Now we need to make a list of your materials! Material Material Cost Total Cost of Materials:

2 4. Labor Cost Estimate the number of hours it might take to make 1 unit of your product hours Your labor charge for 1 hour of work $ /hour Total Labor Cost Labor hours x labor charge per hour 5. Total Cost of making your product (Cost of Materials + Labor Cost):

3 Worksheet 2: Advertising You know much it will cost to make your product, now how much will it cost to advertise your product to the public? Below are the advertising methods available to you: Newspaper Ad Flyers Magazine Radio Television Internet $50/week $100 for a Sunday paper ad 15 cents per color sheet $1500 for a full page color ad $20 for a 60 second spot on local station $150 for 60 second spot on a major station $25 for a 30 second local television station commercial $400 for a 30 second major local network commercial $100 for a banner ad which includes 50,000 impressions (people seeing your ad) Below is a sample of advertising choices and costs for one month. Advertising Choices Cost for 1 Month Full Page Magazine Ad $ Flyers 1000 x.15 = $150 4 Sunday Paper Ads 4 x $100 = $400 2 Radio Spots per day (Local) 30 days x $40 = $1200 Total Advertising Cost $3250

4 Use the table below to outline your advertising plan and costs. You must use at least four different advertising methods. The goal is to reach as many people as possible! Show your work Advertising Costs for One Month Method Cost Total Cost for Advertising for one month:

5 Worksheet #3: Percent Profit Sample: You have decided to try and sell your product. Including labor, (not including advertising cost) it costs $25.00 to make one unit of your product. You have decided to sell each unit for $ This is how you find your percent of profit: $40 - $25 = $15 $15 $25 = = 60% You will make 60% profit on your product. Assume you will be selling your invention. Determine your percent of profit by answering the questions below. 1. What is the cost of making your product including labor but excluding advertising costs? 2. How much will you sell your product for? (Be realistic) 3. To find percent of profit use the following steps: a. Subtract your cost from sale price: b. Divide the answer of a by your cost: c. Write part b as a percent (round to nearest whole number). This is your percent of profit.

6 4. Is this percent of profit reasonable for your product? Why or why not? 5. If you think your percent of profit is too small or too large, try raising or lowering the price of your product and calculate the new percent. (Use as many tables as needed) New price of product: a. Subtract your cost from sale price b. Divide the answer of a by your cost c. Write part b as a percent (round to nearest whole number) New price of product: a. Subtract your cost from sale price b. Divide the answer of a by your cost c. Write part b as a percent (round to nearest whole number)

7 Worksheet #4: College Tuition Now that you ve determined how much to sell your product for, you want to set a goal for how many to sell. You would like to make a profit on your product to pay for college for 1 year. 1. What college might you attend when you leave high school? 2. What is the cost of attending this school for one year? 3. Use the following formula to determine how many of your product you will need to sell. Needed Profit = Income Expenses Let n be the number of product you must sell. means multiply Needed Profit: Income: (Cost of college tuition) (Selling price of product n) Expenses: (Cost to make one product n + marketing costs) 4. Substitute each value from question 3 into the equation below. = - ( ) Needed Profit Income Expenses

8 5. Solve the equation for n. Show your work! = - ( ) Needed Profit Income Expenses n = 6. How many of your product do you need to sell in order to pay for one year of college tuition? 7. Is this a realistic number for you to sell? Why or why not?

9 Advertisement Flyer You will need to create an advertisement in order to get people interested in your product. Your flyer should be created on an 8.5 by 11 piece of paper and must include all of the following: a. Product Image (Can be hand-drawn or created on the computer). b. Sales Pitch or Slogan describing why your product is the best. (Ex: Milkbone Dog Biscuits They keep your dog s teeth strong and healthy!) c. Location where customers can buy your product. d. An incentive for customers to buy your product such as a coupon or rebate. Be creative! For extra credit you may choose to create a business card including your name, your title, the name of your business, a phone number and an address. (The phone number and address can be made up.)

10 Income vs. Expenses Graph: Double Line Graph To create your Income vs. Expenses graph, use the following steps: 1. Draw an x- and y-axis on graph paper. Label the x-axis Number Sold and the y-axis Dollars. 2. You need to figure out the correct scale of your graph. In order to do this: a. Subtract your cost to make the product from your selling price. Then divide your first month s advertising cost by this number. You must label at least this far along on your x-axis. b. Take the number you had to label along the x-axis and multiply by the selling price. You must label at least this far along on your y-axis. 3. Scale your axes evenly starting with 0 on both axes. 4. Plot three points for your income line using the table below: Number Sold Pick any three points along the x-axis INCOME LINE Dollars Multiply each point by the selling price 5. Connect your three points with a ruler and pencil.

11 6. Plot your three points for your expenses line using the following table: Number sold Pick any three points along the x-axis EXPENSES LINE Dollars Multiply each point by the cost to make your product and add the advertising cost to that number 7. Connect these three points with a ruler and pencil. 8. Find the point where the two lines intersect. This is called the break-even point. You will make zero profit at this point but if you move to the right then you will start making profit. Write this point below. (, ) 9. Find the area of your graph that represents your loss and label it. Find the area of your graph that represents your profit and label it. You may choose to use colors to shade in each part of the graph.

12 Directions for Making Your Line Graph in Excel If you would like to make your graph on the computer, following the directions below. 1. Copy the charts from your graph worksheet into Excel as follows, starting with cell A1. Number Sold Dollars Your numbers will be different than the ones above, copy your numbers directly from your chart. 2. Highlight all the cells above by clicking on cell A1 and holding the button down while you drag your mouse over cells A1 through B7. 3. Click on the graph icon in the toolbar on the top of the screen. 4. Choose XY Scatter as your graph type. (You may also choose line graph.) 5. Click next and click next again. 6. Enter your graph titles and label your axes correctly. 7. Click next. 8. Click in the save as new sheet circle. 9. Click Finish 10. Your graph should be just a scatter plot. To connect your points, you can print the graph and connect them by hand or use the draw function. 11. To use the Draw function click view at the top of the screen then toolbars. Choose the drawing toolbar. Click the arrow and connect your points.

13 Product Description/Competitors Guide Now that you ve determined how you will make a profit from your product, you will now investigate your competitors and see how your product compares to theirs. Before you begin researching competitors in your market, create a name for your product. After conducting research in the field, write a paragraph with the following information: describe at least two other similar products on the market, who is selling those products, whom their target customer is, and how much the product costs. You may write the paragraph here or on a separate piece of paper.