Businesspricing
Cost-Plus Pricing Calculator
Price from cost and a target margin. The division by (1 − margin) is the step people get wrong. Adding the margin to cost undershoots the target every time.
Also called: cost plus price calculator, pricing from cost.
Price to charge
₹77
To hit a 35% margin on a fully-loaded cost of ₹50, price at ₹77. That is a 53.85% markup.
Fully-loaded cost
₹50
Implied markup
53.85%
Profit per unit
₹27
Method and background
How this is calculated
To achieve a margin you divide by one minus it, because the margin is measured against the price you are solving for, not against the cost you started with. Adding 35% to cost gives a 26% margin, not 35%.
price = loaded_cost / (1 - target_margin)- c_loaded
- Unit cost plus allocated overhead (currency)