how can I reset my iMac to factory

Here's how to reinstall MacOS:

https://support.apple.com/en-us/HT204904

If your selling your iMac, or just want to do a full clean-install as shown in the above link, first go to disk-utility prior to re-installing MacOS and erase your boot drive completely then go to the option of reinstalling MacOS.

I recommend you connect your wireless keyboard to your Mac using a USB->Lightning cable so it treats it as a wired keyboard. When reinstalling MacOS, it tends to behave better with a wired keyboard.

See instructions in What to do before you sell, give away, or trade in your Mac - Apple Support

That depends on the version of Mac OS that is currently installed. Please let us know and we can advise. If you are considering getting rid of the Mac for whatever reason, please use the advice letter that was provided to you.

If the OP is using Monterey that is not the process!