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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24870
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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I am selling a business where we manufacture Appointment Books.

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I am selling a business where we manufacture Appointment Books. We have made thousands of these books. I do most of the printing. My employees punch, coil and make the books for inventory on the shelves.

I received this statement:
parties plan to use Herb’s calculation of actual costs (no mark up) to the business for delivery to Jim the new buyer of the business.

I don't understand the legal term for (no mark up)?
Are all the normal costs included in the term actual costs, included, like the printing, collating, coiling, purching and my time on the printing press?

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Who is Herb?
Customer: replied 3 years ago.

That is OK I am sorry for not explaining.


 


I am Herb the owner, owner of a print shop that prints the books and we distribute them nationwide.

OK. Generally, the statement "parties plan to use Herb’s calculation of actual costs (no mark up) to the business for delivery to Jim the new buyer of the business." means that it's cost to produce the product.

But you don't get "profits" on the inventory - just what it cost you to produce. The material, labor costs.




So you have to add up what it costs you to produce the inventory. Yes, that would include the printing, collating, coiling, purching and my time on the printing press?

If it costs you $1,000.00 to produce the inventory as it sits (inventory in progress of being manufactured and inventory already manufactured) - that's what you will sell the inventory to the buyer. You will not be able to charge them a "mark up" or profit on the inventory.


So you will have to determine your "inventory" at various stages of production.


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