What This Calculator Does
Dual-mode business calculator to compute gross profit margin percentage and product markup rate from cost and selling price.
How to Use This Calculator?
- Select mode tab: Profit Margin or Markup.
- For Profit Margin: Enter Selling Price / Revenue and Item Cost / Expenses.
- For Markup: Enter Unit Cost and Target Markup Percentage.
- Instantly view calculated Gross Profit, Profit Margin %, Markup %, and recommended Selling Price.
Formula & Calculation Logic
Gross Profit = Selling Price - Cost | Profit Margin % = (Profit / Selling Price) * 100 | Markup % = (Profit / Cost) * 100
Worked Example & Walkthrough
Profit Margin Mode: Selling Price = $150, Cost = $90 => Profit = $60, Profit Margin = 40.00%, Markup = 66.67%. Markup Mode: Cost = $100, Markup = 50% => Selling Price = $150, Profit = $50, Profit Margin = 33.33%.
In-Depth Comprehensive Guide
Profit Margin vs. Markup: Essential Business Pricing Guide
Setting optimal product and service prices requires understanding the mathematical relationship between Profit Margin and Markup.
Margin vs. Markup Definitions
- Profit Margin: Expresses profit as a percentage of the final Selling Price.
Margin % = (Profit ÷ Selling Price) × 100 - Markup: Expresses profit as a percentage of the original Cost Price.
Markup % = (Profit ÷ Cost) × 100
Worked Examples
- Margin Mode: Item Cost = $90, Selling Price = $150. Gross Profit = $60. Profit Margin = 40.00%, Markup = 66.67%.
- Markup Mode: Cost = $100, Target Markup = 50%. Selling Price = $150, Gross Profit = $50, Profit Margin = 33.33%.
Frequently Asked Questions (FAQ)
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