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Financial literacy activity

Cookie Stand: Cost vs Price

Bake 6 cookies. Count the ingredients you used and how many pennies they cost. Then PICK a price to sell each cookie for. Did each cookie EARN more than it COST?

Real World MissionAbout 90 minutesMay use a screenParent help expected

Materials and setup

How this changes by age

Pre-K (ages 3–4)

Bake 6 cookies. Count the ingredients you used and how many pennies they cost. Then PICK a price to sell each cookie for. Did each cookie EARN more than it COST?

Difficulty 1 of 3

Steps

  1. Bake (or pretend-bake) 6 cookies with a parent.
  2. Lay out the ingredients you used and put a pretend price on each: 1 penny per spoon of flour, 1 penny per spoon of sugar, etc.
  3. Add up the pennies. That is the COST.
  4. Pick a price for each cookie (e.g., 5 pennies). When you 'sell' one, count: 'I got 5 pennies, but the cookie cost 2 pennies to make. I kept 3 pennies!'
  5. The 3 pennies you kept is called PROFIT. Practice the word.

Learning objectives

  • Distinguish between COST (what it took to make) and PRICE (what you charge)
  • Notice that profit is what is left after subtracting cost from price
  • Connect ingredient counting to cost calculation

Kindergarten (ages 5–6)

Calculate the cost per cookie. If your batch costs $2 and makes 12 cookies, each cookie costs about 17 cents. Then pick a sell price that earns profit on every cookie.

Difficulty 2 of 3

Steps

  1. Help bake a batch of cookies. Add up the cost of all ingredients used (parent assists with prices).
  2. Count how many cookies you made. Divide total cost by number of cookies to get COST PER COOKIE.
  3. Pick a sell price that is HIGHER than the cost per cookie.
  4. Calculate profit per cookie: sell price minus cost per cookie.
  5. If you sell all 12, what is your total profit?

Learning objectives

  • Calculate cost per unit by dividing total cost by quantity
  • Choose a price that covers cost and earns profit
  • Multiply per-cookie profit by quantity to get total profit

Early elementary (ages 6–8)

Build a real cost spreadsheet for a cookie batch: ingredients, electricity, packaging. Set a price, project profit at different sales volumes, and find your break-even point.

Difficulty 2 of 3

Steps

  1. List ALL costs for one cookie batch: ingredients (look up grocery prices), packaging (bags or napkins), even a small allowance for electricity to bake. Write each cost in a table.
  2. Sum total cost. Divide by number of cookies = cost per cookie.
  3. Pick a sell price. Calculate profit per cookie = price minus cost.
  4. Find break-even: how many cookies must you sell just to cover your cost? (total cost ÷ sell price)
  5. Project profit at 50%, 75%, and 100% sell-through.
  6. Discuss: if your costs go UP next batch (sugar gets more expensive), what happens to profit per cookie at the same price?

Learning objectives

  • Build a complete cost table including non-ingredient costs
  • Calculate break-even quantity
  • Project profit at different sales volumes

Upper elementary (ages 8–10)

Distinguish FIXED costs from VARIABLE costs. Calculate gross margin per cookie and total margin at different volumes. Decide whether to raise prices or cut costs to improve margin.

Difficulty 3 of 3

Steps

  1. Categorize each cost as FIXED (does not change with quantity — oven energy, packaging design) or VARIABLE (scales with quantity — flour, sugar, butter).
  2. Calculate variable cost per cookie. Calculate gross margin per cookie = sell price minus variable cost.
  3. Calculate total profit = (gross margin x quantity sold) minus fixed costs.
  4. Run two scenarios: (a) raise sell price by 25%, (b) cut variable cost by 25% (cheaper ingredients). Which gives more profit at the same sales volume?
  5. Identify the trade-off: cheaper ingredients might lower quality and reduce sales. Higher prices might scare buyers. Which choice would YOU make and why?
  6. Write a one-paragraph business decision memo with your reasoning.

Learning objectives

  • Distinguish fixed costs from variable costs
  • Calculate gross margin and total profit
  • Compare price-increase vs cost-cut strategies and recommend one

Safety and evidence note

Read the full activity before beginning. An adult should supervise tools, heat, food, outdoor work, movement, and experiments as appropriate. Completion records that the activity was done; the child’s explanation, work sample, photo, or demonstration is stronger evidence of learning than a completion check alone.

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