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Cost-plus pricing is a strategy to set the selling price by adding a markup percentage to the product's unit cost. It is common for utilities, government contracts, and retail stores, but it does not account for market demand and competitor prices.
Markup is the difference between the selling price and the cost of a good or service. Learn how to calculate markup, profit margin, and markup percentage, and how markup affects aggregate supply and pricing.
A markup rule is the pricing practice of a producer with market power, where a firm charges a fixed mark-up over its marginal cost. [ 1 ] [ page needed ] [ 2 ] [ page needed ] Derivation of the markup rule
Profit margin is a financial ratio that measures the percentage of profit earned by a company in relation to its revenue. Learn how to calculate profit margin, gross profit margin, operating profit margin and net profit margin, and why they are important for business and investors.
Cost price is the original price of an item or the total outlay required to produce a product or service. Learn about different forms of cost price, such as actual cost, last cost, average cost, and net realizable value, and how they are used in retail systems and stock market theories.
Invoice price is the actual price that the end-customer retailer pays to the manufacturer or distributor for a product. Learn how to calculate the net purchase cost, the difference between invoice price and trade price, and the accounting methods for recording invoice price.
Cost of goods sold (COGS) is the carrying value of goods sold during a period. It includes costs of purchase, conversion and other costs associated with inventory. Learn how to determine COGS, its importance, and its accounting and tax implications.
Value-based pricing is a market-driven strategy that sets the price according to the perceived or estimated value of a good or service. It contrasts with cost-based pricing, which sets the price based on the production and delivery cost. Learn more about the characteristics, advantages and disadvantages of value-based pricing.