Compute Unit Price – Finance Chapter Section 1 Buying and Selling

Finance unit section 1 purchasing. We’re going to do some comparison shopping so that we can get the most for the least amount of
money and to do that we’ll do something called unit pricing. Here’s an example, shopping for coffee, we have Maxwell
House original roast medium ground coffee. 30.6 ounce container $20.49, the same product is also packaged in the a 11.5 ounce container costing $3.64. We can approach this problem in different ways but we need to be consistent, so that the
quantities need to be equalized so that fair comparison can be made. If the
quantities are different, how do you tell which option is better? We’re going to do something known as unit price. Unit price involves finding the cost per one, could be, pound, foot, ounce, one fluid ounce, or some other quantity. The unit price is calculated by the formula taking total cost divided by the total quantity. Here’s an example we
have some welding rods costing $13.68 and come in a package containing 37 rods. So to calculate the unit price replace the total cost with $13.68, total quantity with the 37 rods and then do the indicated division. Taking the numerator 13.68 divide by 37 the quantity,
resulting in a price of $0.37 per rod. We could use this then to compare it to some other package having different number of rods in it
and different price. When we’re doing shopping we need to
also consider additional costs. Had this been an item sold in a catalog, or the
internet, there maybe taxes, shipping that add to the total cost. If we take that
into consideration versus buying at the local store. Now the unit price changes by adding that tax and shipping on to the cost of the rods, for a total
$23.92 divided by 37 rods in the package resulting in a price of $0.65 per rod. Which is almost double the original $0.37 per rod. You’re now ready to do practice set 1
page 3 problems 1-5.

Leave a Reply

Your email address will not be published. Required fields are marked *