KurilooStudy·Practice·Succeed
Aptitude Topics

Cost Price & Selling Price

Every basic commercial exchange centers on two core values: the amount spent to acquire or produce an item, and the amount collected when it is sold.

Fundamental Principles

Cost Price (CP)

The total amount paid by a buyer or manufacturer to acquire a commodity, including any associated overhead costs such as transportation, repairs, or manufacturing labor.

Selling Price (SP)

The final amount received by the seller when a commodity is traded or sold to an end consumer.

Essential Formulation Tips

  • Always add overhead expenses like cartage, freight, or renovation directly to the initial purchase price to get the true Cost Price.
  • If the Selling Price is exactly equal to the Cost Price, the transaction results in a break-even state, meaning there is no profit and no loss.

Shortcut Execution Techniques

  • When tracking transactions, think of the Cost Price as your 100% baseline value. Any gain adds directly to this 100%, and any loss subtracts directly from it.

Contextual Inquiries (FAQs)

Q: Do overhead costs change the initial purchase price?

A: Yes. The practical Cost Price includes all spending needed to get the product ready to be sold.