1. Define the term cost price according to the given context.

Cost price, often abbreviated as CP, refers to the original amount paid to acquire an item or product before any markup or profit is added. It includes all expenses related to the purchase, such as shipping fees, taxes, and any other direct costs associated with bringing the product to a state ready for sale. Understanding cost price is essential for businesses to set selling prices that cover expenses and generate profit. One fun fact about cost price is that it’s not just crucial for setting prices, but it also plays a key role in seasonal sales and discounts! Retailers calculate how much they're willing to mark down an item while still making a profit. This strategic thinking ensures they clear out inventory while still keeping that cash register ringing!