How would you include all costs in determination of price of

How would you include all costs in determination of price of a product?

Solution

All prices must cover costs and profits.The most effective way to lower prices is to lower costs.Before setting a price for your product, you have to know the costs of running your business. If the price for your product or service doesn\'t cover costs, your cash flow will be cumulatively negative, you\'ll exhaust your financial resources, and your business will ultimately fail.Most important is to add profit in your calculation of costs. Treat profit as a fixed cost, like a loan payment or payroll, since none of us is in business to break even.