Episode # 4 Costs of Goods Sold (Language of Business)
The cost of goods sold is exactly what it sounds like; the amount of money that is needed to produce an item or service. This can include materials to create the product or labor costs in paying to have it made.
In order to set a logical price, you need to understand how much this cost is. For example, if you were to make gift baskets and the items you put into them cost a total of $20, selling them for any less than that will result in a loss, and selling them for exactly that will not turn a profit.