Entrepreneurship, Costing and Consumer Skills
What the exam tests
This domain tests costing a product, setting a price, understanding consumer rights and making informed buying decisions. You need accurate arithmetic and clear reasons, not just a list of costs.
Costing and pricing
Unit cost = materials + direct labour + overhead. Materials include fabric, thread, zip, interfacing and packaging; add wastage. Labour = hours × hourly rate. Overhead covers rent, electricity, machine depreciation and insurance. Markup is added to cost; margin is profit as a percentage of selling price. Break-even units = fixed costs ÷ (selling price − variable cost per unit).
Consumer skills
Compare unit prices, check fibre content and care labels, keep receipts, and know rights to redress for faulty goods. Budget for need before want; evaluate durability and total cost of ownership.
Worked example
A tote bag uses N$45 fabric, N$8 thread and notions, and N$7 packaging. Labour is 2 hours at N$15/hour = N$30. Overhead is N$10. Total cost = 45 + 8 + 7 + 30 + 10 = N$100. Apply a 30% markup: 0.30 × 100 = N$30, selling price N$130. Check: if the market will pay only N$115, reduce overhead or labour, or accept a lower markup; do not simply hide the loss.
Traps
Do not forget labour or overhead; students often price only fabric. Do not confuse markup with margin. Do not ignore wastage or VAT where it applies. Do not claim consumer rights without proof of purchase.