Scope:
These guidelines apply to any item that is sold as part of any of Ihsan's activities. This includes, books, food, drinks, promotional items, clothes and others.
Guidelines:
The price of any item to be sold shall be calculated as: cost + overhead + margin profit
The cost of the item should include employee time, if any.
The overhead is calculated according to Ihsan's financial guidelines
The margin profit should not exceed 25% of the cost of the item
The distribution of the revenue from the sale will be as follow:
The cost of the item is reimbursed to the account it came from
The overhead share is distributed according to the financial guidelines
The profit margin goes to the account of the project that is selling the items
Project leaders who want to use higher profit margins shall obtain the approval of the treasurer and the president
Example 1:
A sweatshirt with Ihsan logo:
cost of the 100 shirt = $500
1 hour of designer time = $10
25% overhead = $127.5
margin profit (25%) = $127.5
Total = $765
Sale price per shirt = 765/100 = $7.65
Example 2:
Soft drinks
cost of 24 can pack = $8.00
25% overhead = $2
margin profit (25%) = $2
Total = $12
Sale price per can = $0.5
Example 3:
Lunch Menu (burger/chips/juice) for 20 people
cost of the ingredients for 20 burgers = $20
cost of chips for 20 = $5
cost of juice for 20 = $4
25% overhead = (20+5+4)*0.25 = $7.25
margin profit (25%) = $7.25
Total = $43.5
Sale price per person (sandwich + chips + juice) = $2.175 (or $2.2)