How do you calculate cost price from selling items?

Answer 1

If you are trying to figure out what price to sell something at, this is a detailed problem. It depends on what goes into the product that you are selling. If say, you run a store, and you buy items, then house them at your store until people come and buy them from you. Your costs are the cost of the item, plus labor (money paid to employees) plus Overhead (which includes rent, electricity, depreciation on equipment, property tax, advertising, telephone, interest on loans and a number of other costs).

So what you need to figure is how much you need to mark up items to cover the original cost of the item plus overhead, labor, and have some left over for profit.

The profit is the owner's reward for taking the risk of opening the store, signing a rental agreement, hiring the employees, buying the advertising, etc.

Some estimates need to be made as to how many you expect to sell at a particular price, in order to cover those costs and make a profit. There are entire books written on the subject.