In this lesson, you will turn your recycled handicraft ideas into a clear production plan. You will learn how to list tools and raw materials, take simple measurements, and prepare a basic bill of materials. Small enterprises survive when they know their costs and set a realistic selling price. Today, you will practice estimating materials, computing total cost, adding simple labor cost, and deciding on a fair markup. By the end of the lesson, you will be ready to choose one design and plan it like a young eco-entrepreneur who understands both creativity and budgeting.
🎯 Learning Goals
By the end of the lesson, you will be able to:
- Prepare a simple production plan for one recycled handicraft, including tools, materials, steps, and measurements.
- Construct a basic bill of materials (BOM) and compute the total material cost for one unit of a product.
- Estimate labor cost, apply a reasonable markup, and determine a fair selling price for a selected recycled handicraft.
🧩 Key Ideas & Terms
- Production plan – A step-by-step guide showing tools, materials, sequence of operations, and time needed to make a product.
- Measurement – The process of finding length, width, height, or quantity using standard units like centimeter, meter, piece, or set.
- Bill of materials (BOM) – A table listing all materials, their quantities, and unit costs needed to produce one product.
- Unit cost – The price of one unit of a material (for example, cost per meter of cloth or per piece of zipper).
- Total material cost – The sum of all material expenses used to make one item.
- Labor cost – The estimated value of the time and effort used to make a product.
- Markup – An additional amount added to the total cost to cover profit and other expenses.
- Selling price – The final price at which the product is offered to customers.
🔄 Quick Recall / Prior Knowledge
Look back at Day 1 to connect your product ideas with today's focus on planning and costing.
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Name one recycled handicraft idea you liked from Day 1.
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Answers will vary: recycled bottle pencil holder, sachet coin purse, carton drawer organizer, rolled paper basket, fabric scrap keychain, and others. -
What makes that product useful to a buyer?
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Possible ideas: it solves an organizing problem, protects items, decorates a space, or can be given as a gift. -
Why is it important to consider durability when designing a product for selling?
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Durable products last longer, make customers happy, and build trust in the maker or brand. -
In simple words, what does it mean for a product to be “marketable”?
Show Answer
It is attractive, useful, safe, and priced fairly so people are willing to buy it.
📖 Explore the Lesson
Checkpoint 1 – From Idea to Production Plan
Mini-goal: Understand why every recycled handicraft needs a simple written production plan.
In Day 1 you played with many ideas: pencil holders from bottles, wallets from sachets, organizers from cartons, and more. Today, you will choose one idea and plan how to actually produce it. A production plan is like a map for making a product. It tells you what tools and materials you need, what steps you must follow, and how much time you might spend on each step. Without a plan, you may forget materials, waste time, or repeat steps. With a plan, you can work more safely, consistently, and efficiently.
A simple production plan usually contains four main parts. First is the product description: What are you making? Who will use it? What is its size and special features? Second is the list of tools and equipment: scissors, cutters, rulers, glue gun, sewing kit, or any device needed. Third is the list of materials, including recyclables and added supplies like glue, thread, zippers, or paint. Finally, you write the sequence of operations, which is the step-by-step procedure from preparing materials to finishing and cleaning up.
When you write a production plan, you train yourself to think ahead. You imagine the finished product and then work backward: What must happen first? What should be done next? Which steps must dry or wait before the next action? This thinking can prevent common problems, such as cutting materials too small, gluing parts in the wrong order, or discovering missing supplies in the middle of work.
Real-life tie-in: Professional manufacturers, even of very simple products, always follow written procedures. Whether they make soap, bags, or furniture, they rely on production plans so that each item meets the same quality standard. You are practicing the same discipline on a smaller scale.
Mini-summary: A production plan organizes your idea into a clear sequence with identified tools, materials, and steps. It allows you to work safely and efficiently while aiming for consistent quality.
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What four main parts should appear in a basic production plan for your recycled product?
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Product description, list of tools and equipment, list of materials, and sequence of operations. -
Why is it risky to start cutting and gluing without a written plan?
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You may waste materials, forget important steps, damage parts, or end up with different sizes or shapes that do not fit. -
How can a production plan help you if you later decide to make ten pieces of the same product?
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It provides a repeatable procedure so each piece is made the same way, making production faster and more consistent.
Checkpoint 2 – Measuring and Listing Materials Accurately
Mini-goal: Practice taking basic measurements and listing materials clearly for one product.
Accurate measurement is at the heart of good handicraft work. When you design an organizer, purse, or holder, you need to know its length, width, and height to cut pieces correctly. Using a ruler or tape measure, you can record measurements in centimeters (cm) or millimeters (mm). For example, you might decide that your desk organizer will be 10 cm wide, 12 cm tall, and 8 cm deep. From this, you can compute the size of each panel or compartment, leaving small allowances for folding or gluing.
Materials are measured in various units: pieces (pcs), pairs, sets, meters (m), centimeters (cm), grams (g), or sometimes “by weight” like 1/4 kilo of beads. When planning a recycled handicraft, most recyclables such as bottles and carton boxes are counted by piece, while added materials like ribbon or thread may be measured by length. You should write each item clearly in a materials list with its unit. For example: “Used 1 L bottle – 1 pc,” “Carton board – 2 pcs,” “Glue stick – 1/4 pc,” or “Ribbon – 30 cm.”
Being specific about quantities helps you prepare enough materials before starting. If your design uses three panels of the same size, you can compute the total area needed and check if one box is enough or if you must collect more. You also think about extra allowance for mistakes—maybe you need one additional bottle or extra cardboard in case of errors. This mindset turns you from a casual crafter into a thoughtful planner.
Real-life tie-in: Tailors, carpenters, and construction workers depend on exact measurements to avoid wasting cloth, wood, or cement. In the same way, careful measurement of recycled materials respects resources and saves time.
Mini-summary: Listing materials with units and quantities, based on accurate measurements, prepares you to cut and assemble parts correctly while avoiding waste.
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Why should you write both the name of the material and its unit (for example, piece or centimeter)?
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It makes your list clearer, helps you prepare the right amount, and supports later cost computation. -
Give one example of a material measured by length and one by piece in a recycled project.
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By length: ribbon, lace, fabric strip. By piece: plastic bottle, carton box, zipper, button. -
How can measurement errors affect the quality of your product?
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Pieces may not fit together, edges may be uneven, the product may look crooked or weak, and you may waste materials.
Checkpoint 3 – Understanding the Bill of Materials (BOM)
Mini-goal: Learn how a bill of materials summarizes everything you need and what it costs.
After identifying and measuring your materials, the next step is to prepare a bill of materials (BOM). The BOM is like a shopping and costing list in one. It normally has columns for the name of material, unit, quantity needed, unit cost, and total cost. For recycled projects, some materials—like donated bottles or boxes—may have zero cost, while others, such as glue, thread, or new accessories, have a small price.
To compute total cost for each material, you multiply quantity by unit cost. For example, if a zipper costs ₱15 each and you need one piece, its total material cost is ₱15. If ribbon costs ₱10 per meter and you need 0.30 m, then the total cost for ribbon is ₱3. You repeat this for each material, then add all totals to get the total material cost per unit. Even if some items are free, you still list them with a cost of zero to show they are part of the design.
A clear BOM has many benefits. It guides purchasing, shows whether the product is affordable, and acts as a reference when you scale up production. If you want to make ten pieces of the same item, you can simply multiply each quantity and total cost by ten. The BOM also helps you compare designs; if two product ideas are equally nice but one is much cheaper to produce, it may be the better choice for a school project or small business.
Real-life tie-in: Entrepreneurs use their BOM to negotiate with suppliers, find cheaper alternatives, and decide whether a product is truly profitable. Without it, they might guess prices and end up losing money without understanding why.
Mini-summary: The bill of materials lists all materials, shows how much is needed, and calculates total material cost per product, forming the foundation of pricing decisions.
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What basic columns should appear in a simple BOM table?
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Name of material, unit, quantity, unit cost, and total cost. -
Why is it important to include “free” recycled materials in the BOM?
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To show the complete recipe for the product and to remember that these items are required even if they do not add to money cost. -
How can a BOM help you decide which product idea to pursue?
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By comparing total material costs; it shows which design is more affordable to produce while still meeting quality goals.
Checkpoint 4 – Estimating Labor Cost
Mini-goal: Recognize that your time and effort have value and must be included in costing.
Many students think only about material cost when pricing handicrafts. However, any product also contains the maker's time and effort, called labor. If you ignore labor, you may sell items very cheaply and become discouraged because your earnings do not match your hard work. Estimating labor cost teaches you to respect your own skills.
Labor cost can be estimated in simple ways. One method is to decide on a reasonable “rate per hour” for your work, then multiply this by the time it takes to make one item. For example, if you use ₱40 per hour as a student rate and it takes 30 minutes to complete one product, the labor cost per piece is ₱20. Another method, when time is difficult to track exactly, is to assign a fixed labor amount per item based on experience and teacher guidance.
When you work as a group, you may share labor cost among members or divide tasks so that time is used efficiently. Even if your project is for school and not for actual selling, including labor cost in your computation gives you a more realistic picture of what the product would cost in real life. You also begin to see how improving skills and speed can affect income.
Real-life tie-in: Tailors, carpenters, and salon workers all charge for labor, not just for materials. Customers pay for skill, precision, and time. As a future entrepreneur, you are training yourself to think that your work also deserves fair compensation.
Mini-summary: Labor cost is the value of the time and effort used to make a product. Including it in costing helps you price items fairly and appreciate your own work.
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Why should labor cost be included when computing the cost of a product?
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Because products require time and effort; including labor ensures you do not underprice your work and helps show the true cost of production. -
If your chosen rate is ₱50 per hour and one item takes 24 minutes to make, what is the labor cost per item?
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24 minutes is 0.4 hour. Labor cost = ₱50 × 0.4 = ₱20. -
How can practicing and improving your skills affect labor cost over time?
Show Answer
As you work faster and more efficiently, the time needed per item decreases, so labor cost per piece can be reduced or profit can increase.
Checkpoint 5 – Markup and Selling Price
Mini-goal: Learn how to add markup to total cost to arrive at a reasonable selling price.
Once you know both the total material cost and labor cost per unit, you can compute the total production cost. This is often written as:
Total production cost = total material cost + labor cost.
However, most entrepreneurs do not sell products at exactly this cost. They add a markup to cover other expenses (like transport, packaging, and tools) and to earn profit. Markup is often expressed either as a peso amount (for example, add ₱10 per item) or as a percentage of the total cost (for example, add 30% of total cost). The formula for selling price using percentage markup is:
Selling price = total production cost + (total production cost × markup rate).
For instance, if your total production cost is ₱35 and you apply a 40% markup, the markup amount is ₱14, giving a selling price of ₱49 (you might round to ₱50). The challenge is to choose a markup that is fair to both you and your customer. Too low, and you earn almost nothing; too high, and people may refuse to buy. You must consider what similar items cost in markets and the spending ability of your target buyers.
Real-life tie-in: Small vendors at school fairs or bazaars often experiment with prices. They observe which prices attract customers while still bringing profit. Over time, they learn to balance cost, markup, and market demand.
Mini-summary: Selling price is based on total production cost plus markup. Choosing a reasonable markup protects profit while staying affordable for customers.
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If total material cost is ₱18 and labor cost is ₱12, what is the total production cost?
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Total production cost = ₱18 + ₱12 = ₱30. -
Using the total production cost in item 1, compute the selling price with a 50% markup.
Show Answer
Markup = ₱30 × 0.50 = ₱15. Selling price = ₱30 + ₱15 = ₱45. -
Why should you observe prices of similar products before deciding on your selling price?
Show Answer
To ensure your price is competitive and realistic; customers compare options and may avoid products that are much more expensive without clear added value.
Checkpoint 6 – Checking if the Product Is Worth Making
Mini-goal: Use planning and costing information to decide whether to continue, adjust, or change product ideas.
After completing a production plan, BOM, labor estimate, and selling price, you can now ask an important question: “Is this product worth making?” This does not mean only “Is it profitable?” but also “Is it realistic for our group, schedule, and resources?” For example, a product that uses free materials but requires three hours of detailed work may be difficult to mass-produce for a fund-raising event. Another design may use slightly more materials but take only 30 minutes per piece, making it easier to sell in larger quantities.
To decide, you can compare product options using simple criteria: total production cost, selling price, estimated profit, time needed per piece, level of difficulty, safety, and attractiveness. Discuss as a group which design fits your goals. You might adjust the size, reduce decorations, or simplify steps to save time and materials while keeping the main function and style.
Sometimes, your costing work will reveal that a design is too expensive compared with the market price of similar products. This is not a failure; it is useful information. You can then challenge yourselves to redesign the product using cheaper materials or more efficient techniques. In this way, planning and costing become tools for continuous improvement rather than just math exercises.
Real-life tie-in: Many businesses have stopped selling certain products because they discovered that, after careful costing, those items brought little or no profit. They refocused on products that customers liked and that gave better income. You are learning the same decision-making process now.
Mini-summary: Evaluating cost, time, and market demand helps you decide whether to proceed with, adjust, or replace a recycled handicraft design before mass production.
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Name two factors, other than profit, that you should consider when deciding whether to produce a design.
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Time needed per piece, difficulty level, availability of materials, safety, and attractiveness to target buyers. -
How can costing work lead you to improve your design?
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By showing which parts are too expensive or time-consuming, so you can simplify, resize, or change materials while keeping function. -
What should you do if your computed selling price is much higher than similar products in the market?
Show Answer
Consider redesigning to use cheaper materials or fewer steps, lowering your markup, or choosing another product idea that is more affordable.
💡 Example in Action
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Example 1 – Simple BOM for a Recycled Pencil Holder
A pencil holder is made from a used 1 L bottle, cardboard, colored paper, glue, and ribbon. Construct a simple BOM for one piece.Show Answer
Sample BOM: Bottle (1 L, recycled) – 1 pc, unit cost ₱0, total ₱0; Carton board – 1 pc (approx. A5 size), unit cost ₱4, total ₱4; Colored paper – 2 sheets 1/2 size, unit cost ₱1 each, total ₱2; Glue stick – 1/4 pc, unit cost ₱20, total ₱5; Ribbon – 30 cm, unit cost ₱10/m, total ₱3. Total material cost = ₱14. -
Example 2 – Adding Labor Cost
The same pencil holder takes 25 minutes to make. If the student labor rate is set at ₱48 per hour, compute labor cost per piece.Show Answer
25 minutes = 25/60 hour ≈ 0.42 hour. Labor cost ≈ ₱48 × 0.42 ≈ ₱20.16 (can be rounded to ₱20). -
Example 3 – Computing Selling Price
Using material cost ₱14 and labor cost ₱20, total production cost is ₱34. If the markup rate is 40%, what is the selling price?Show Answer
Markup = ₱34 × 0.40 = ₱13.60. Selling price = ₱34 + ₱13.60 = ₱47.60, which may be rounded to ₱48 or ₱50 depending on pricing strategy. -
Example 4 – Comparing Two Product Options
Option A: pencil holder, production cost ₱34, selling price ₱50. Option B: small drawer organizer, production cost ₱50, selling price ₱80. Both use recyclables. What questions should you ask before deciding which to produce for a school fair?Show Answer
Questions: Which product will students and teachers actually need more? Which one is easier and faster to produce in quantity? Can buyers afford ₱80, or is ₱50 more acceptable? Do we have enough materials for both designs? -
Example 5 – Adjusting Design to Reduce Cost
A sachet wallet uses a new zipper that costs ₱25 and fabric lining costing ₱15. Students find the total cost too high. What design changes could reduce cost while keeping function?Show Answer
Ideas: use a smaller or cheaper zipper; design a flap with a button instead of zipper; replace bought lining with recycled fabric; reduce size to use fewer sachets. Each change should still protect coins or bills and look neat.
📝 Try It Out
Work in your notebook or on separate sheets. Use one of your own recycled product ideas whenever possible.
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Write a short product description for one recycled handicraft you want to make. Include purpose, target user, and approximate size.
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Sample: “A recycled desk organizer for students, made from cartons and bottles, size 10 cm × 15 cm × 8 cm, with separate sections for pens, scissors, and sticky notes.” -
List all tools and equipment you will need for your chosen product.
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Examples: scissors, cutter, ruler, pencil, glue gun, glue sticks, needle and thread, hole punch, cutting mat, old newspapers for table cover. -
Prepare a draft materials list showing material name, unit, and quantity for one piece of your product.
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Teacher checks for clarity: “Carton box – 1 pc; small cartons – 3 pcs; colored paper – 2 sheets; glue – 1/4 stick; ribbon – 40 cm,” etc. -
Using sample or real prices from nearby stores, assign unit costs to each material in your list. If a material is recycled and free, write cost = ₱0.
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Answers will vary. Teacher may provide typical prices for glue, tape, zipper, ribbon, etc., if learners cannot research immediately. -
Compute the total material cost for one piece of your product.
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Students multiply quantity × unit cost for each material and add totals. Teacher checks whether all items are included and computations are correct. -
Estimate how long it will take you to make one piece (in minutes). Choose a reasonable student labor rate per hour and compute labor cost per piece.
Show Answer
Example: 40 minutes, rate ₱60/hour. 40 minutes = 2/3 hour ≈ 0.67 hour. Labor cost ≈ ₱60 × 0.67 ≈ ₱40.20 (≈ ₱40). -
Add your total material cost and labor cost. This is your total production cost per piece.
Show Answer
Answers will vary. Teacher ensures learners add correctly and understand this is cost before markup. -
Choose a markup rate between 20% and 50%. Compute your markup amount and suggested selling price.
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Example: production cost ₱40, markup 30% → markup ₱12, selling price ₱52, possibly rounded to ₱50 or ₱55 depending on strategy. -
Write one or two sentences explaining why your chosen selling price is fair to both you and your customer.
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Look for reasons mentioning cost of materials and labor, product quality, uniqueness, and comparison to similar items in the market or school fair. -
List at least two possible adjustments you could make if classmates say your price feels too high.
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Ideas: reduce size or decorations to lower cost; look for cheaper materials; lower markup percentage; create a simpler version of the product.
✅ Check Yourself
Answer these items to see how well you understand planning, measuring, and costing.
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(Multiple Choice) Which item is not usually part of a basic production plan?
a. Product description
b. List of tools and equipment
c. Bill of materials
d. School class scheduleShow Answer
Correct answer: d. School class schedule. -
(Multiple Choice) Which unit of measurement is most appropriate for ribbon used as decoration?
a. Piece (pc)
b. Meter (m) or centimeter (cm)
c. Pair (pr)
d. Kilogram (kg)Show Answer
Correct answer: b. Meter (m) or centimeter (cm). -
(True/False) In a BOM, it is acceptable to leave out materials with zero cost because they are recycled.
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False. All materials should be listed, even if they are free. -
(True/False) Labor cost refers only to the money you pay other people, not your own work.
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False. Labor cost also includes the value of your own time and effort. -
(Short Answer) Define “unit cost” in your own words.
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It is the price of one unit of a material, such as per piece, per meter, or per pack. -
(Multiple Choice) Your total material cost is ₱20 and labor cost is ₱15. What is your total production cost?
a. ₱5
b. ₱20
c. ₱35
d. ₱45Show Answer
Correct answer: c. ₱35. -
(Short Answer) Why is it helpful to know how long it takes to make one item?
Show Answer
So you can estimate labor cost, plan your time, and decide whether the product is practical to produce in larger quantities. -
(Short Answer) Give one possible reason why two products with similar materials could have different selling prices.
Show Answer
One may require more time and skill, have better finishing, or include extra features that add value, so its labor cost and markup are higher. -
(Multiple Choice) Which formula correctly represents selling price with percentage markup?
a. Selling price = total cost − markup
b. Selling price = total cost ÷ markup
c. Selling price = total cost + (total cost × markup rate)
d. Selling price = markup rate − total costShow Answer
Correct answer: c. Selling price = total cost + (total cost × markup rate). -
(True/False) If your selling price is too low, you may sell many items but still fail to earn enough profit.
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True. Low prices without enough markup can lead to small or negative profit. -
(Short Answer) What should you do if your computed profit per item is very small but you do not want to raise the selling price?
Show Answer
Look for cheaper materials, reduce waste, simplify the design, or improve speed so labor cost per item goes down. -
(Short Answer) Mention one way a clear production plan can improve the safety of your work area.
Show Answer
It ensures tools and materials are prepared and arranged properly, reducing rushing, clutter, and accidents while working. -
(Multiple Choice) Which item below best describes markup?
a. The amount lost in every sale
b. The extra amount added to cost to cover profit and other expenses
c. The list of tools and materials
d. The time needed per productShow Answer
Correct answer: b. The extra amount added to cost to cover profit and other expenses. -
(Short Answer) Why is it useful to compare your planned selling price with prices of similar products sold nearby?
Show Answer
To check if your price is realistic and competitive, and to adjust your design or markup if needed. -
(Reflection Check) After learning about costing, do you feel more confident or more cautious about pricing your recycled handicraft? Explain briefly.
Show Answer
Answers will vary; learners may say they now understand why pricing needs careful thinking and feel more prepared to explain their prices to customers.
🚀 Go Further (optional)
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Create a BOM Template – Design a neat blank BOM form you can photocopy and use for other projects.
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Teacher guidance: Encourage columns for material name, unit, quantity, unit cost, and total cost. Let learners decorate borders lightly to reflect eco themes. -
Market Price Survey – Visit nearby stores or online shops (if allowed) to record prices of similar organizers, wallets, or décor items.
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Teacher guidance: Ask learners to compare their computed selling prices with real market prices and discuss reasons for differences. -
Time-and-Motion Study – During the next practical session, time each step of making one product and note where delays happen.
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Teacher guidance: Use findings to discuss how to rearrange tools, materials, or tasks to reduce wasted movement and improve efficiency. -
Cost-Reducing Redesign – Take an existing design and challenge yourself to reduce material cost by at least 10% without harming function.
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Teacher guidance: Ask learners to present before-and-after sketches and updated BOMs, explaining their design decisions. -
Profit Estimation Activity – Imagine selling your product at a school fair. Compute possible profit for 10, 20, and 50 pieces.
Show Answer
Teacher guidance: Let learners practice multiplying profit per item and discuss realistic targets considering time and manpower.
🔗 My Reflection
Notebook prompt:
Think of one recycled handicraft idea you want to continue developing. Based on today's lesson, what surprised you about planning and costing? Describe how your view of “price” changed and what you will do differently when you design and sell eco-friendly products in the future.
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