Question

you have a company that rent dresses for customers. if a dress is sold at retail on 700. what price for renting could you charge customers? why is this price ? how would estimate all cost regarding dress rental?

Answer 1

The the price that I would charge from the customers depned on a certain factors that includes the profit I want to make, the expenses that I would have to incur on the dress after getting it back from the customers so that it is rentable to the next customer. In this situation let's suppose that the dry cleaning charges and the charges for damge have to be borne by the customer before returning the dress.
In this situation the rental charge depends on the cost of the product, the profit I want to make and the number of times the product could be resold.
Let's suppose that I have bought the product from the wholesale market for 400 and after incurring the transportation and other costs, it came to me for 550. I want to make a profit of 250 and the dress can be resold for a total of 5 times.
So I will charge my customers (550+250)/5= 160 .

For dress rental , this is one of the most appropriate method to estimate the price and cost.
in the above situation , I have kept all th other costs Nil. Keeping in mind that there might be other costs, these should be added to the cost of the dress , amd after including the profit margin, the total amount should be divded by the estimated numer of reslaes that can be made to get the price to be charged from each customer.