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What does the Markup vs margin calculate?
What selling price produces the intended margin? This calculator uses unit cost, target gross margin, and units sold to estimate selling price immediately in your browser.
With the values currently entered, the result is $100.00 — selling price per unit. It also shows markup on cost, gross profit / unit, and gross profit at quantity.
How to use the Markup vs margin
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Unit cost
- Target gross margin — entered in %
- Units sold — entered in units
Markup vs margin formula
Selling price = cost ÷ (1 − margin); markup = profit ÷ cost
Assumptions
- Unit cost includes all variable costs.
- Fixed overhead and tax are excluded.
Practical guide
Markup vs margin example and edge cases
What selling price produces the intended margin? Let's use a concrete example, then look at the assumptions that can move the answer.
Example: A practical markup vs margin scenario
For this example, use unit cost of 65, target gross margin of 35 %, and units sold of 100 units. These are starting values, so replace them with numbers that match your situation.
- Unit cost
- 65
- Target gross margin
- 35 %
- Units sold
- 100 units
Calculated result$100.00selling price per unit
Start with selling price per unit. Then check markup on cost, gross profit / unit, and gross profit at quantity to understand what sits behind the main result.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the main result first. The supporting figures for markup on cost, gross profit / unit, and gross profit at quantity explain how the estimate is built.
- The method is Selling price = cost ÷ (1 − margin); markup = profit ÷ cost. Keep the units consistent and use values from the same time period.
Edge cases worth checking
When unit cost is unusual
Unit cost includes all variable costs. Double-check this input before relying on the result.
When units sold is uncertain
Fixed overhead and tax are excluded. Run a lower and higher value to see a useful range.
What changes the result most
Unit cost
Use a current amount for unit cost. Include fees or recurring costs that belong in the same figure.
Target gross margin
Test a lower and higher target gross margin. A small percentage change can move the final result more than expected.
Units sold
Use the count you expect in real life. Round up when a partial units cannot be purchased or used.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Unit cost: 10% lower
59$90.77selling price per unit
Unit cost: 10% higher
72$110.77selling price per unit
Target gross margin: 10% higher
39 %$106.56selling price per unit
Common mistakes
Check unit cost
Unit cost includes all variable costs. Make sure this matches the number you enter.
Keep units sold consistent
Fixed overhead and tax are excluded. Use the same units and time period throughout the calculation.
Do not rely on one markup vs margin scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What selling price produces the intended margin?
It does not replace a quote, contract, accountant, or local employment guidance.