Costing and Pricing

Costing involves calculating all the expenses involved in producing a product or service, including materials, labor, and overhead costs. Pricing is setting a selling price based on these costs plus a profit margin, market conditions, and competitor prices. The goal is to cover costs while remaining competitive and ensuring profitability. Effective costing ensures you know your minimum acceptable price, while strategic pricing balances earning profit with attracting customers. Both are essential for sustainable business operation, ensuring products are priced fairly and profitably in the marketplace.