How to Calculate Cost Price: Simple Formulas Explained

Learn how to calculate cost price using simple formulas in our quick Q&A video. Master the basics of CP, SP, and Profit.

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To find the cost price, use the formula: Cost Price (CP) = Selling Price (SP) - Profit. If there’s a loss, use: CP = SP + Loss. Knowing two out of these three variables—CP, SP, and Profit/Loss—allows you to solve the equation.

FAQs & Answers

  1. What is the formula for calculating cost price? The formula for calculating cost price is CP = SP - Profit. If there is a loss, use CP = SP + Loss.
  2. Why is it important to know the cost price? Knowing the cost price helps businesses determine selling prices, understand profit margins, and make informed financial decisions.
  3. Can I calculate cost price if I only know the selling price and loss? Yes, you can calculate cost price using the formula CP = SP + Loss if you know the selling price and the amount of loss.

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For more insights on financial literacy, check out our video on maximizing business profit margins and understanding accounting basics. Enhance your skills with our expert tips!

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