Lego – Pricing Your Product/Service

 

http://cache.lego.com/r/www/-/media/portal%20v2010/news/da-dk/201402/lego_world_logo_2013_original_rgb_v1.png?l.r=-2101850201

 

Directions:  Lego has hired your product development team to create a new toy using Lego pieces you select.  You only have 30 minutes.  In groups you must do the following:

1.    Decide as a group what toy you want to make.

2.    Choose one person to collect the 20 Lego pieces from the table.http://metrouk2.files.wordpress.com/2014/02/10667_front_11.jpg

3.    Build the toy as a team.

4.    Using the cost sheet, determine the cost of materials using the unit cost listed below.

5.    Calculate how much time it took to build the toy to determine labor costs to product the toy.

6.    Identify a target customer.

7.    Give the toy a name.

8.    Calculate the selling price so that you make a profit.

 

Part A:  Record how many Legos of each color are needed to assemble your toy.  Then, calculate the total cost per color by multiplying the cost of the color by the number of units used.

Color

Cost

# of Units Used

Total Cost per Color

Red

$0.15

 

 

Blue

$0.15

 

 

Black

$0.09

 

 

Yellow

$0.06

 

 

White

$0.09

 

 

Orange

$0.03

 

 

Light Green

$0.02

 

 

Grey

$0.06

 

 

Light Blue

$0.05

 

 

Other

$0.25

 

 

 

 

TOTAL Cost of Parts =

[A]

 J Part B and Part C are on page 2

 

Toy Idea (What is it?): _________________________________________________________

Toy Name: _____________________________________

Target Customer: ______________________________________________________________________

______________________________________________________________________

 

Part B & C (Cost of Labor and other costs):  Next, gather your materials needed to build your toy.  Put together your toy using people in your group.  Record how long it takes to build the toy.

 

Time (in hours) needed to build the Toy:    ______________ Hours (This will be a percentage of an hour)

Determine how much you are going to pay per hour to build the toy:  $ _____________ / Hour

                NOTE: Minimum wage is $7.25

Multiply the time (in hours) and the hourly pay rate for your labor cost per toy. _________ / Toy [B]

One more cost associated with this toy is deliver and handling.  What do you think the cost for deliver and storage or packaging might be? _________ [C]

 

What do you think the selling price should be for this toy?  Fill in the box below and see if you have made a profit. 

 

Calculate PROFIT of one unit

Selling Price per Each Toy (What do you want to sell this toy for?)

  $

Text Box: ExpensesCOGS per Unit for Materials Cost [A]

[A]     $

Labor Cost to build one unit [B]

[B]     $

Other Variable Expenses per Unit (Shipping & Handling) [C]

[C]    $

Total Expenses per Unit (A +B+C)

        $

Profit  (Selling Price – Total Expenses)

  $

 

Be prepared to share your toy and your calculations with the class!

 

Use the space below for any calculations:

 

 

 

 

 



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