When calculating the cost of goods sold , a business must add the cost of everything necessary to produce that item. In the case of an appliance, this calculation would include the parts, the labor to assemble the item and the appliance's transportation from the factory to the retail location. If a business runs a retail store, the cost of the item also would include a portion of the building's operating expenses and the sales associate's salary. For items that are sold through a website rather than a physical store, the expenses of designing and operating the site are included in the cost.
Likewise, with a $500 to $1000 horse. These are often youngsters with little training or handling, or horses with soundness, conformation or behavioral issues. Of course, there's the exception to every rule—there are gems among lower priced or giveaway horses, but it may take a keen eye and willingness to deal with difficult issues. There are many stories of people taking these 'sows ears' and making them into 'silk purses'. They might not be the right horses for first-time horse owners, however. A cheap horse may be more expensive in the long run if you have to contend with vet bills, specialized shoeing and paying trainers.