Step 5: Determine the selling price:
To determine the selling price, you need to add a profit margin to the total product cost per unit. The profit margin is usually expressed as a percentage of the total cost. For example, if you want to add a 20% profit margin, you will multiply the total product cost per unit by 1.20.
Selling price per unit = Total product cost per unit X (1 + Profit margin as a percentage)
In conclusion, product costing is essential for manufacturing concerns to determine the total cost of producing a product and set a selling price that ensures profitability. By following the steps outlined above, you can accurately calculate the total product cost and set a competitive selling price.
Hope this will help my readers, Always welcome 🙂