Unit VII Material Culture: The Stuff
of Life

Lesson 6 Louisiana Crafts and Decorative Arts

Name ___________________________________________ Date _______________

**Task:**
Pretend you are a Louisiana craftsperson who wants to start marketing
your handmade work at festivals in the state. How will you know
how much you would have to charge to make a profit? Is it even
worth your time and effort to enter this market? Use the definitions,
example, and worksheet below to help you find out the __true cost__
of making your craft items. Then decide whether to try to market
your craft.

My craft is ______________________________________________

Cost of Materials__________ Labor cost__________ Overhead costs__________ WHOLESALE PRICE__________ Multiply by 2 to get a RETAIL PRICE__________

There are many "hidden" costs
in producing a craft item. It is important to figure ALL expenses
when deciding how much an item should cost. The **Wholesale Price**
is the total of your labor, materials, and overhead. Craftspeople
who want to ensure that their time and effort is profitable double
the cost estimate to arrive at their **Retail Price**.

**Pricing One Item**

1. Determine the Cost of Materials __________ 2. Determine the number of hours spent making the item __________ 3. Multiply Hours X Wage for Labor cost __________ 4. Determine overhead costs __________ 5. Add Materials + Labor + Overhead to get WHOLESALE PRICE__________ 6. Multiply by 2 to get a RETAIL PRICE__________

**Some definitions to help
you**

**Labor Costs**

Production Time- The cost of your labor. For this exercise, use the Minimum Wage - $5.25 per hour and multiply that by the number of hours you worked plus the number of hours you spent on office time.

Office Time- The time you spend designing your product, collecting and looking for "free" items, ordering supplies, paying bills, record keeping, making repairs, and anything else related to producing the craft item.

**Material Costs**

Direct Costs- List the cost ofallmaterials. For those that use only a portion of what you buy, figure the cost of that portion; i.e., paint is $4.00 a can and you use half, so figure $4.00/2 = $2.00.

**Transportation Costs**

The postage and shipping costs you pay when ordering materials.

**Overhead Costs**

This includes the costs for such things as your equipment, loan interest, rent, electricity, water, phone, insurance, postage, packing materials, promotional materials.

**Equipment depreciation**

All equipment wears out sooner or later and then it must be replaced. Figure how many years it will probably last and divide the cost by that number of years. This is the

cost per year. Then divide that number by the number of hours you plan to work in a year. The number you get is the cost of using that equipment for that craft item for an hour. Multiply that answer by the number of hours you use it or one craft item to get the depreciation cost. For example, if you use a sewing machine for 12 hours to make a quilt, the depreciation on the sewing machine would be figured this way:

Sewing Machine

Cost $800.00 Expected life 20 years Depreciation per year $800/20 = $40 per year Hours worked per year 20 hours per week x 45 weeks = 900 hours Depreciation per hour $40/900 = $ .04 Depreciation for this item 12 hours x $ .04 = $ .48

**Rent, Electricity, Water, Phone**

These expenses are paid every month for the house or shop where you make your crafts. You need to figure how much of each is used for producing your craft item. This is called

Prorating. For each of these, figure how many hours are in a month, then divide the total hours into the amount of the bill to find out how much it costs per hour. Then figure how many hours per month you spend working on your craft, and multiply that by the cost per hour. For an individual craft item, multiply the cost per hour by the number of hours spent making the item.

Example:Hours in a month - 31 days x 24 hours - 744 hours in a month

Hours worked per month (20 hours a week x 4 weeks = 80 hours per month)

RentIf rent is $400, $400/744 = $ .5376 per hour (round it to $ .54)

Prorated Cost of Rent, 80 hours x $ .54 = $43.20 per month

Prorated Cost for 1 item, 6 hours x $ .54 - $3.24

ElectricityIf electricity bill is $75.00, $400/744 = $ .10 per hour

Prorated Cost of Electricity, 80 hours x $ .10 = $8.00 per month

Prorated Cost of 1 item, 6 hours x $ .10 = $ .60

PhoneIf phone bill is $25.00, $25/744 = $ .033 per hour

Prorated Cost of Phone, 80 hours x $ .03 = $2.40 per month

Prorated Cost of 1 item, 6 hours x $ .03 = $ .18

**Water, phone, insurance, postage,
packing materials, promotional materials**

Use the formulas as you used for Rent and Electricity to prorate any of these costs that you incur to produce your craft item.

Wholesale Cost for Making
a Duck Decoy |
||

Labor |
||

Production time - (Multiply the number of hours by $5.25) | 6 hours x $5.25 | 31.50 |

Office Time (Multiply the number by $5.25) | 2 hours x $5.25 | 10.50 |

Materials (List them) |
||

Direct Costs |
||

Cypress block |
4.00 | |

Paint (6 -4oz cans, different colors, at $3.00 each) |
||

Lt. Grey 1/2 can = $3.00/2 | 1.50 | |

Green - 1/4 can - $3.00/4 | .75 | |

Black - 1/4 can - $3.00/4 | .75 | |

Blue - 1/4 can - $3.00/4 | .75 | |

Yellow - 1/8 can - $3.00/8 | .37 | |

White - 1/8 can - $3.00/8 | .37 | |

Sealer - $2.00 a can |
1/2 can - $2.00/2 | $1.00 |

Nails |
2 @ .01 | .02 |

Glass eyes |
.50 | |

Glue - 1 tube - $1.25 |
Few drops | .02 |

Transportation Costs |
||

Postage for paint |
1.09 | |

Overhead Costs |
||

Prorated Rent bill |
$ .5376 per hour x 6 hours | $3.24 |

Prorated Electricity Bill |
$ .10 per hour x hours | .60 |

Prorated Water Bill |
$ .03 per hour x 6 hours | .18 |

Total Wholesale Cost |
$57.14 | |

Retail Price |
2 x Wholesale cost | $114.28 |

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