Monday, January 28

Cost Price

Price can be classified into cost price and selling price. Cost price is the value that is paid by someone to purchase goods or products. Cost price is popularly represented as C.P. Selling price on the other hand is the price that a store or product owner sells a product. Selling price is popularly represented as S.P. Below is two examples on cost price and selling price.
Example 1: Maria bought action toys for 80 rupees per piece and sold it out for 100 rupees per piece. Here, Rs.80 is the cost price of action toys and Rs.100 is the selling price of the same.
Example 2: Rohit bought building toys collection for Rs.2500 from online. He sold the same collection for Rs. 2000. Here, Rs. 2500 is the cost price and Rs. 2000 is the selling price of the building toys collection.
Cost price can be classified into four main forms – Actual cost, Last cost, Average cost and Net realizable value.
Actual Cost Price: Actual cost is the complete amount of a product including duty taxes, service taxes and so on. For example: Christy bought role play toys online for Rs.599 exclusive of shipping charges that is Rs.99. Here, actual cost of the role play toys is 599+99 = Rs.698.
Last Cost Price: Last cost is the value of an item on its last purchase. For example: I bought by mobile phone at Rs.13500 and now the same phone model’s price is Rs. 10000 only. Here, Rs.13500 is the last cost price of the mobile phone.
Average Cost Price: Average cost is the average of new and old stock values. For example: the new price of a product is Rs. 10 and the old price was Rs.8 and therefore, the average cost is Rs.9.
Net Realizable Value: Net realizable value is the average price of a product in the market.  For example: The average value of Barbie dolls in market is Rs.199 and it can also be referred as Net realizable value of Barbie dolls.
These are some basics on Cost Price.

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