The project that I chose to work off of was an idea for an accessory, a simple leather band that was completed in the second course of this program. The initial calculations for the production of this accessory went down as follows:

One square foot of leather (online) – $7.75

.15 hours @ $15.00 – $3.75

Total production cost = $11.50

20% Profit – $2.30

Total cost plus profit – $13.80

Estimated retail price = $25.00

I polled a few friends regarding what they would pay for an accessory that was edgy and genuine leather, and was coming from a boutique or high-end retailer. Most of them were comfortable at roughly $25, and felt that that was a fair price.

Going through this assignment, it made it much more clear how profit and manufacturing costs play into selling a product. Additionally, you can see where the mark-up happens for the sellers to make profit, too.