Calculate selling price using the cost-plus method. Add a desired profit percentage to your total direct and indirect costs.
Cost-plus pricing is a straightforward method where you add a fixed profit percentage on top of total production costs. It guarantees a profit on every unit sold but does not account for market demand or competition.
Direct costs are expenses directly tied to production such as raw materials and labor. Indirect costs include rent, utilities, administration, and other overhead not tied to a specific product.
Cost-plus pricing works well for custom projects, government contracts, manufacturing, and industries where costs are predictable. It is less suitable for competitive markets where demand-based pricing is more effective.