Cp Formula

Cp Formula

The cost price formula, which is also known as CP Formula, is used to determine an item’s true price. In other terms, it is the cost of each commodity that we buy. The selling price establishes the profitability with the aid of the CP Formula. As a result, one makes a profit if the initial value is less than the selling price, and one loses money if the original value is more than the selling price. To further grasp the  CP Formula, students will review two CP Formula on the Extramarks part, analyse the factors at play, and work through a few instances.

Definition of Cost Price

The cost price is the amount of money spent on producing goods or providing services before any profit is made by the maker or supplier. Other names for it include the latest cost, average cost, and real cost.The cost price includes all extra costs linked with production, real estate, materials, power, R&D, testing, worker salaries, and other expenses. The cost price and the selling price of anything are always used to determine profit and loss.

What is the Cost Price Formula?

Cost price is the price we pay to purchase a good, and it may be calculated using the two simple CP Formula  shown in the graphic below

Formula 1: To determine if they made money when selling a product, we used the formula below.

The CP Formula: Selling Price – Profit

Formula 2: They use the following formula if they lose money when selling a product.

The CP Formula: Selling Price + Loss

Formula 3: The following is the formula for profit (gain) % and selling price:

The CP Formula = {100/(100 + Profit%)} × SP.

Formula 4: The equation based on loss percentage and SP is as follows:

The CP Formula = {100/(100 – Loss%)} × SP.

Process Capability Formula

Process capability is referred to as  CP Formula. Having stated that, the  CP Formula calculation method is employed to ascertain a process’s measurable attribute to the specification’s breadth. Calculations or histograms are typically used to represent the process capability’s final resolution. 

The following is the formula to compute CP:-

The CP Formula = (USL–LSL)/6×σ


the upper specification limit = USL 

the lower specification limit = LSL 

the standard deviation = σ 

What is Process Capability Ratio?

Using the upper and lower limits, respectively, process capability is utilised to pinpoint any inconsistencies in the process. The assessment and process capability ratio allows for the observation of the following factors:

The process is perfectly centred, or a perfect process, if the value of CP is equal to 1.

If the CP value is higher than 1, the procedure may be tolerable. This demonstrates that the method appears to be able to do this. (CP> 1 is compatible with processes)

the process is unable if the process length exceeds the tolerance and the process variation falls within the tolerance range.

By allowing for the inherent irregularity of the process, CPk makes it possible to calculate how closely the performance of the process adheres to the condition demanded.

If CPk is negative, one must make sure that the process one inherited produces results that are both entirely outside of and outside of the client’s specified range. The CPk calculating formula is different.

The process has six capabilities, and the CPk of 3 indicates that the output is excellent, which is what we need to do.

We need a minimum CPk of 1.33, or 4 s, to satisfy the majority of our clients.

Examples on Cost Price Formula

1 A toy costs $340 to sell, and the store owner makes $60 in profit. Utilise the cost price formula to determine the toy’s cost price.


Here, selling price = $340 and profit = $60

Using the cost-price formula, we get

CP = Selling Price – Profit

= $(340 – 60)

= $280

2 An item was sold for $ 230 at a $20 loss. Determine what its cost price was using the cost price formula.


Here, selling price = $230 and loss = $20

Using the cost-price Formula, we get

CP = Selling Price + Loss

= $(230 + 20)

= $250 

3 Jamie loses 6% on a $900 chair sale. How much did she pay for it? Using the formula, calculate the cost price by using the formula?


Given, Loss = 6%; SP = $900; CP = ?

If the loss is 6%,

 it means that if the cost price is $100,

 The loss incurred is $6. 

If CP is $100, then SP is $94

When SP is 94, CP = $100

When SP is $900

CP = (100/94) × 900 = $957.44

∴ CP = $957.44

Maths Related Formulas
Rectangle Formula Gaussian Distribution Formula
Slope Formula Geometric Distribution Formula
Area Formula For Quadrilaterals Parallel Line Formula
Arithmetic Mean Formula Pearson Correlation Formula
Geometry Formulas Population Mean Formula
Interest Formula Sum Of Arithmetic Sequence Formula
Selling Price Formula Cos Inverse Formula
Circumference Formula Direct Variation Formula
Cone Formula Direction Of A Vector Formula
Correlation Coefficient Formula Fibonacci Formula

FAQs (Frequently Asked Questions)

1. What is the Cpk Formula?

Cpk is an abbreviation for process capability index, which is a measure of process capability. It demonstrates how finely a process is capable of creating output by its overall parameters. It also assesses the constancy of our average performance. 

The cpk calculation formula is as follows


Cpk = min(USL−mean/3σ,mean−LSL/3σ)




USL = the upper specification limit,


LSL = the lower specification limit.


σ = standard deviation

2. What exactly is the CP Formula and Cpk Formula?

CP Formula = Cpk is an example of an optimally centred process. Cpk and Ppk are both linked with the standard deviation and process centring about the centre point to the allowable tolerance criteria. Cpk = CP Formula is an estimate (1-k). And, because the maximum value for k is 1.0, the value for Cpk will always be equal to or less than Cp. The Cpk capability index, like the Ppk capability index, is merely a function of the data mean and standard deviation, not a notional (goal) number that may be historical or provided by the client.

3. What is the total cost price?

The full cost price of a product is the price estimated by a company based on its direct cost per unit of output plus a markup to cover overhead costs and profits.

4. What is the difference Between Cost and Selling Price?

The cost price is the amount paid to buy an object, often known as the real price. The selling price, on the other hand, is the price at which the object is sold.

5. When a gain percentage is given, what is the CP Formula?

When the gain (profit) percentage and selling price are supplied, the Cost price formula = {100/(100 + Profit%)}

6. When a loss percentage is given, what is the CP Formula?

When a loss percentage and SP are provided, the cost-price formula is stated as 

The CP Formula = {100/(100 – Loss%)} × SP.