35% margin on a 50 loaded cost
- Unit cost
- $40.00
- Overhead allocated per unit
- $10.00
- Target margin
- 35%
Price to charge$76.92
arithmetic identity: 50/0.65
Open this exampleBusinesspricing
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
$76.92
To hit a 35% margin on a fully-loaded cost of $50.00, price at $76.92. That is a 53.85% markup.
Fully-loaded cost
$50.00
Implied markup
53.85%
Profit per unit
$26.92
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)
Worked examples
Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
zero margin prices at cost
- Unit cost
- $40.00
- Overhead allocated per unit
- $10.00
- Target margin
- 0%
Price to charge$50.00
degenerate case
Open this examplea 100% margin is unreachable
- Unit cost
- $40.00
- Overhead allocated per unit
- $0.00
- Target margin
- 100%
Price to charge$0.00
boundary: would require an infinite price, so the engine declines
Open this example