Real-Life Math -- Solution
You sell each comic to the retailer for $2.20. If you account for
an interest rate of 4 percent of the amount borrowed over 4 months,
the distributor's take (25 percent of the sales) and the 10 percent that
you need to pay yourself, what is your total profit?
Your first step
is to find out your total income.
You sell 8,000 comic books to the
retailer for $2.20
Your total income = 8,000 x $2.20
Total
income = $3,256
Your next steps are to figure out your total costs.
Interest
and Loan
It costs $480 for the promotional posters and $1,000
to print the comic books. This is the amount you'll need to borrow from
the bank.
$480 + $1,000 = $1,480
On top of the loan
is the interest.
4 percent x $1,480 = $59.20
The total
cost of borrowing from the bank is $1,539.20 ($1,480 + 59.20).
Distributor's
Costs
The distributor receives 25 percent of the sales.
25
percent x $3,256 = $814
Payment to Yourself
To
pay yourself adequately, you need 10 percent of the sales.
10 percent
x $3,256 = $325.60
Total Costs
Total costs equals
the distributor's costs plus the cost of borrowing from the bank plus
the payment to yourself.
$814 + $1,539.20 + $325.60= $2,382.80
Total
Costs = $2,382.80
Total Profit
Now you're ready
to figure out your total profit.
Total Profit = Total Income - Total
Costs
Total Profit = $3,256 - $2,382.80
Total Profit
= $873.20
Your total profit for the sale of your comics is $873.20
-- and you did it all on your own!
It may not seem important to comic
illustrators to develop their math skills. "It will probably help," says Mike
Cherkas, especially when you run your own business.