Question

margot would love to sell a lemon bar ice cream scoop. she wants to use the prime cost method to figure out how much to sell it for. the labor cost is 2.00, the raw food cost is 1.15. the labor cost % is 35%, and the food cost % is 30. what should the selling price be?

Answer 1

To determine the selling price of the lemon bar ice cream scoop using the prime cost method, combine the labor cost ($2.00) with the food cost ($1.15) for a total of $3.15, which represents 65% of the price. Divide this by 0.65 to find a selling price of approximately $4.85.

Step-by-step explanation:

The question pertains to the prime cost method of pricing a product, specifically a lemon bar ice cream scoop. To calculate the selling price using the prime cost method, Margot must take into account both labor costs and raw food costs, along with their respective percentages in the overall price structure. Given that the labor cost is $2.00 and represents 35% of the price, and the raw food cost is $1.15 and represents 30% of the price, we see that the combined cost is $3.15. Since these costs together make up 65% of the total price (35%+30%), we can represent the total selling price as 100%.

To find the selling price (100%), we divide the total prime cost ($3.15) by the total percentage that the prime cost represents (65%).

Selling Price = Total Prime Cost / Percentage of Prime Cost

Selling Price = $3.15 / 0.65

Therefore, the selling price should be approximately $4.85.