How this calculation works
Selling price = cost x (1 + markup rate). Gross profit = selling price minus cost. Margin = gross profit divided by selling price.
Business and pricing
Markup Calculator
Start with cost and markup to estimate selling price, gross profit and margin.
Formula
Selling price = cost x (1 + markup percentage / 100). Margin is profit divided by selling price.
Example
A 50% markup on a 40 cost creates a 60 selling price and 20 gross profit. The profit margin is 33.3%, not 50%.
Common mistake
Markup and margin are related but not the same. Do not swap them in pricing decisions.