1. List each variable costs for one of your company’s products or services, with a cost estimate for each variable cost. If you have more than one product or service, choose one of them.

2. Add the variable costs per unit to get the total cost of goods or services sold per unit.

3. List the fixed costs for your company, with estimates for how much each cost will be per month. If some of your fixed costs are one-time purchases, like a computer or equipment, divide the total cost of the purchases by the number of the months you expect to use the purchase.

4. Add the fixed monthly costs to get the total fixed costs month.

5. Calculate the selling price you would need in order to break even if your company sold 100 units of your product or service, using the steps below.

A. Divide your total monthly fixed costs (from question 4 above) by 100. Which is $4.45.

B. Add the total fixed cost per unit (from 5a above) to the total cost of good or services sold per unit (from question 2 above). This is the selling price you would need in order to break even if you sold 100 units per month.

6. Calculate the number of units you would need to sell in order to break even, using a selling price of your choice. Use the steps below.

A. Choose a selling price that is higher than your total cost of goods or services sold per unit (the amount from the question 2 above) but that is different from the selling price from question 5b above. Pick a price you think is reasonable.

B. Subtract the total cost of goods or services sold per unit (the amount from question 2 above) from the selling price. This is the gross profit per unit.

C. Divide the total monthly fixed costs by the gross profit from 6b above. This tells you how many units you must sell to break even.

7. Describe two things you could emphasize about your product in order to help make it attractive to your target market. What makes you think these things matter to this target market?

8. Identify a competitor to your company and find out what makes their prices are for similar products or services. Do you want your prices to be higher, lower, or the same as your competitors? Why?

9. Will your company use cost-based markup, or retail based markup? Why?

10. Do you think the demand for your product will be elastic or inelastic? Why?

11. Describe at least one pricing Strategy you will use and explain why you think it will be effective.