One way or another, the main task of the seller is to profitably sell his goods, that is, to make a profit. At the same time, it is very important to correctly calculate the price. The main thing is not to sell cheap, but also not to scare off potential buyers with exorbitant amounts. When developing a pricing policy, it is necessary first of all to build on the costs incurred, and then form the final cost, taking into account the desired profit. So, to calculate the cost of production, you need the following.
Instructions
Step 1
First of all, determine which costs will be classified as variables, and which can be considered constant. So the first type includes expenses, the amount of which changes with a change in the amount of goods produced. The more we produce, the more costs we bear. This group will contain materials, raw materials, components, piecework wages of employees.
Step 2
The group of fixed costs includes such costs as rent, expenses for the repair and maintenance of equipment and premises, hourly wages, depreciation deductions and other payments that do not depend on how many goods were manufactured and sold. Even if you have not produced a single unit in a given month, you still have to pay for the premises, as well as pay for the work of employees who have a fixed rate.
Step 3
Variable costs are calculated directly per unit of output by dividing their total by the quantity produced, while fixed costs are charged to the cost of the total output.
Step 4
Thus, fixed and variable costs will form the cost, the minimum value that the manufacturer should receive in order not to incur losses and be able to continue its activities.
Step 5
At the last step, it is necessary to determine the desired rate of return, the addition of which to the cost price will determine the final price of products for consumers.
Step 6
Among other things, when forming a price, it is worth considering factors such as supply and demand in the market. After all, if your product is unique or stands out among others for its high quality, and the demand for it is great, then you can increase the profit margin (within reasonable limits). Well, if, for example, a crisis has begun in the country, and the product being produced is not an essential item, then you should think about a certain price reduction, so as not to lose customers at this stage.
