Calculating selling price involves determining costs and profit margins. Key factors that affect profit are demand, expenses, prices, economic conditions, and product selection. Businesses aim to increase profits by boosting sales, cutting costs, and improving efficiency. Cost of goods sold refers to the direct costs of producing or acquiring inventory and is deducted from revenue to determine gross profit. Common pricing methods include markup pricing and keystone pricing. Markdowns are price reductions used to promote sales of slow-moving inventory.

1. Calculating Selling Price