Calculating fundraising profit involves subtracting the cost of manufacturing or purchasing a product from the selling price. Other expenses, such as advertising and shipping, must also be considered. Multiplication can be used to calculate total profit.
Typically, calculating fundraising profit is as easy as calculating money earned from selling items for profit. An individual can start by finding out how much it costs to manufacture or purchase the product that will be sold at the fundraiser. Once someone calculates this cost, they can use simple subtraction to calculate the fundraising profit. Basically, he can subtract the cost to manufacture or produce the item from the total selling price; the answer to this basic mathematical problem is profit. In some cases, however, there are other expenses to include in the cost of a fundraising product or service, such as advertising, organizing the fundraiser, and shipping or delivery. To correctly calculate a profit, these expenses must also be subtracted.
An individual who needs to calculate fundraising profit can start with a basic math problem. For example, if the leader of an organization initiates a fundraiser for gourmet cookies, he will need to determine the cost involved in making them. If it costs $2.00 ($) to make a batch of cookies and each batch sells for $5.00, the fundraising profit for each batch will be $3.00. If people participating in the fundraiser sell 1,000 batches of cookies, he can use multiplication to calculate the total profit. In this case, he could multiply 1,000 by $3.00 to get the total profit of $3,000.
Simple subtraction problems work well when all the organization needs to consider is the cost of making or purchasing an item. In some cases, however, there are other costs involved that need to be considered in fundraising calculations. If, for example, an organization starts a fundraiser that involves selling coupon books for $20 and the books cost the organization $10, the profit would be $10 on each book. If the organization has to pay for shipping to get the books, this could change the profit numbers.
If the same organization pays $50.00 to ship 500 books, it can divide $50.00 by 500 to determine the cost of shipping each book. The cost per book would be $0.10 in this case. As such, the cost of obtaining the product for fundraising would be $10.10 each and the profit, if the books sold for $20, would be $9.90. If 500 of these books were sold, the profit would be $4,950. This fundraising profit calculation method can also be used if an organization has advertising, organization, or labor costs to include in their calculations.
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