# Handout 7.6: Four Questions and Profit Example

Name: ____________________________ Date: ______________ Period: ______

Unit 7, Lesson 7.6. Calculators allowed and encouraged, all period, for everybody.

## Part 1: The four questions every business has to answer

| # | The question | What it means |
|---|---|---|
| 1 | **What ______________?** | Something that is wrong, hard, or annoying for a real person. |
| 2 | **Who ______________?** | A specific kind of person, not "everybody." |
| 3 | **What do you ______________?** | The thing you make (a product) or the work you do (a service). |
| 4 | **What does it ______________, and what do you ______________?** | Cost is what you spend. Price is what you charge. |

**Product or service?** Write one of each from your own work this year.

A **product** I made this year: ________________________________________

A **service** I could do for somebody: __________________________________

**Customer** means the person who ______________. It is not always the person who ______________.

## Part 2: The problem behind five real businesses

Work in your team. Five rows in five minutes. One sentence each. Move fast.

| Business | What problem does it solve? | Who has that problem? |
|---|---|---|
| A barber shop | | |
| A phone repair counter | | |
| A school bus company | | |
| A bakery | | |
| A lawn mowing crew | | |

**The push question, for every row:** would somebody pay to make that problem go away, and about how much?

## Part 3: Revenue, cost, and profit. One clean example.

**The class T-shirt.**

### One shirt

| Line | Amount |
|---|---|
| Blank shirt | $4.00 |
| Printing | $2.50 |
| **What it costs to make ONE shirt** | $________ |
| What you charge for one shirt | $12.00 |
| **Profit on ONE shirt** ($12.00 minus your cost) | $________ |

### Forty shirts, and you sell all forty

| Line | Math | Amount |
|---|---|---|
| **Revenue** (money in) | 40 shirts times $12.00 | $________ |
| **Cost** (money out) | 40 shirts times $6.50 | $________ |
| **Profit** | revenue minus cost | $________ |

**Write the formula from memory:**

______________ minus ______________ equals ______________

### Now it breaks. You ordered 60 shirts and you only sold 40.

| Line | Math | Amount |
|---|---|---|
| **Revenue** (you only sold 40) | 40 times $12.00 | $________ |
| **Cost** (you paid for 60) | 60 times $6.50 | $________ |
| **Profit** | revenue minus cost | $________ |

**What happened?** Write one sentence.

____________________________________________________________________

____________________________________________________________________

**Hold up your answer for the 60-shirt profit on the count of three.**

## Part 4: Business or hobby?

A **hobby** costs you money and you do it because you like it. A **business** brings in more than it costs, and somebody else decides whether it is worth paying for.

**A hobby is not worse than a business.** Most of what makes life good is a hobby. This is a question about money, not about worth.

Vote on each. Then write your decision with a reason that uses one of the four questions **and at least one number.**

| # | The situation | Business or hobby? | Why? Use a question number and a number. |
|---|---|---|---|
| a | A student bakes cookies for their family every Sunday. | | |
| b | A student bakes cookies and sells them at a school event for $1.00 each. They cost 35 cents to make. | | |
| c | A student makes bracelets, gives them away, and spends $30.00 a month on string. | | |

**For situation b:** if they sell 40 cookies, what is the profit?

Revenue: 40 times $1.00 = $________
Cost: 40 times $0.35 = $________
Profit: $________

## Exit card

Fold over and hand in.

Name: ____________________

**1. One real problem you have seen this week that somebody would pay to have solved, and who would pay:**

Problem: ____________________________________________________________

Who would pay: ______________________________________________________

**2. The profit formula, from memory:**

____________________________________________________________________

## Word bank [check with a native speaker]

| English | Turkish | Portuguese | Spanish |
|---|---|---|---|
| entrepreneur | girişimci | empreendedor | emprendedor |
| business | işletme (iş) | negócio | negocio |
| problem | sorun (problem) | problema | problema |
| customer | müşteri | cliente | cliente |
| product | ürün | produto | producto |
| service | hizmet | serviço | servicio |
| revenue | gelir (satış geliri) | receita | ingresos |
| cost | maliyet | custo | costo |
| profit | kâr | lucro | ganancia (beneficio) |

**Sentence frames:** "The problem is ___. The person who has it is ___." / "Revenue minus cost equals profit."

* * *

## Teacher key

**Part 1, the four questions:** 1. What **problem**? 2. Who **has it**? 3. What do you **make or do**? 4. What does it **cost you**, and what do you **charge**?

**Customer** means the person who **pays**. It is not always the person who **uses it**. (School bus: the district pays, the student rides. Kids' cereal: the parent pays, the child eats it.)

**Part 2, sample answers.** Accept any answer that names a problem a real person has. The strong answers are the ones that say what happens if nobody solves it.

| Business | Problem | Who has it |
|---|---|---|
| Barber shop | Your hair grows and you cannot cut the back of your own head. | Anybody with hair, especially people who have to look a certain way for work or school pictures. |
| Phone repair counter | Your screen broke and a new phone costs hundreds of dollars. | Anybody with a phone. People who dropped it and cannot afford to replace it. |
| School bus company | Children live too far from school to walk and their adults are at work at 7 a.m. | Families and the school district. The district pays; the student rides. |
| Bakery | You want fresh bread or a birthday cake and you do not have the time, the oven, or the skill. | People with a celebration, people in a hurry, restaurants that resell it. |
| Lawn mowing crew | Grass grows every week and somebody has to cut it, and not everybody can or wants to. | Homeowners, older adults, businesses, people who work six days a week. |

**Part 3, the arithmetic:**

One shirt: cost to make **$6.50** ($4.00 plus $2.50). Profit on one shirt **$5.50** ($12.00 minus $6.50).

Forty shirts, all sold: revenue **$480.00**; cost **$260.00**; profit **$220.00**.

The formula: **revenue minus cost equals profit.**

Sixty ordered, forty sold: revenue **$480.00**; cost **$390.00** (60 times $6.50); profit **$90.00**.

What happened: you paid to make 20 shirts that nobody bought, which cost $130.00, so the profit dropped from $220.00 to $90.00. Accept any answer that says you paid for shirts you did not sell.

**The hold-up check:** the right answer is **$90.00**. If more than a quarter of the class holds up $220.00, they have not separated cost per unit from total cost. Reteach in 60 seconds using ten shirts: "You ordered 10 at $6.50, that is $65.00. You sold 6 at $12.00, that is $72.00. Profit $7.00, not $33.00." Then return to the 60-shirt version.

**Part 4:**

| # | Answer | Why |
|---|---|---|
| a | **Hobby** | No customer, no revenue. Question 2 has no answer: the family is not paying. |
| b | **Business** | All four questions are answered. Margin is 65 cents a cookie; 40 cookies is $40.00 revenue, $14.00 cost, **$26.00 profit**. |
| c | **Hobby** | Money goes out and none comes in. Question 4 is answered only on the cost side. It may still be worth doing; that is not what the question asks. |

Situation b arithmetic: revenue **$40.00**, cost **$14.00**, profit **$26.00**.

**Watch for this:** a student who argues that (c) is a business because the bracelets have value. That is a good argument and the right response is question 4: what does the maker charge? Nothing. Then it is a hobby until they charge something. Do not shut the argument down; it is exactly the reasoning the criterion wants.

**Exit card scoring:** line 2 is right or wrong, and it is a five-second check that tells you whether Lesson 7.8's numbers work can move at speed. Line 1 is not graded; **keep every card.** Reading eight of them aloud at the start of Lesson 7.7 starts the brainstorm from a warm place and saves about four minutes.

**The handout as a whole** is scored complete, partial, or missing for daily work.

**Grade 6:** three businesses instead of five. Use the ten-shirt version of the T-shirt example throughout (10 blanks at $4.00, printing at $2.50, cost $65.00; sell 10 at $12.00 for $120.00; profit $55.00). The 60-shirt twist is optional.

**Grade 8:** add the fifth question after the four: **what stops somebody else from doing the same thing tomorrow?** Answer it for two of the five businesses. Also compute break-even on the T-shirt example if there were a $60.00 one-time design fee: $60.00 divided by the $5.50 margin is 10.9, so **11 shirts**, rounded up, because you cannot sell part of a shirt. That previews Lesson 7.8.