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Why is cost price important in price determination?​
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5 votes
Why is cost price important in price determination?​

User Thnetos
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23 votes

answer

The most important factor affecting the price of a product is its cost. ADVERTISEMENTS: Product cost refers to the total of fixed costs, variable costs and semi variable costs incurred during the production, distribution and selling of the product. ... The price for a commodity is determined on the basis of the total cost.

User Bobe
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27 votes
27 votes

Answer:

The cost price is the price you buy a product for. You need to compare the cost price to the selling price to know whether you got a profit or loss (did you make money or did you not).

If you don't know the cost price, you don't know whether you have a profit or loss. Of course everyone wants a profit (make money) so to determine a selling price the cost price is important.

User Floriank
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