Markup Percentage Calculation

Markup Percentage Definition

Define the markup percentage as the increase on the original selling price. The markup sales are expressed as a percentage increase as to try and ensure that a company can receive the proper amount of gross or profit margin. Furthermore, markups are normally used in retail or wholesale business as it is an easy way to price items when a store contains several different goods. Now, look at the markup percentage calculation.

Markup is great. But if you aren’t intentionally pricing for profit, then you’re missing out on some opportunities for big improvements. Click here to download your free Pricing for Profit Inspection Guide now.

How to Calculate Markup Percentage

By definition, the markup percentage calculation is cost X markup percentage. Then add that to the original unit cost to arrive at the sales price. The markup equation or markup formula is given below in several different formats. For example, if a product costs $100, then the selling price with a 25% markup would be $125.

Gross Profit Margin = Sales Price – Unit Cost = $125 – $100 = $25

Now that you have found the gross profit margin, let’s look at the markup percentage calculation:

Markup Percentage = Gross Profit Margin/Unit Cost = $25/$100 = 25%

The purpose of markup percentage is to find the ideal sales price for your products and/or services. Use the following formula to calculate sales price:

Sales Price = Cost X Markup Percentage + Cost = $100 X 25% + $100 = $125

As with most things, there are good and bad things about using markup percentage. One of the pitfalls in using the markup percentage to calculate your prices is that it is difficult to ensure that you have taken into consideration all of your costs. By using a simple rule of thumb calculation, you often miss out on indirect costs.

(NOTE: Want the Pricing for Profit Inspection Guide? It walks you through a step-by-step process to maximizing your profits on each sale. Get it here!)

Markup Percentage Calculation Example

For example, Glen started a company that specializes in the setup of office computers and software. He decided that he would like to earn a markup percentage of 20% over the cost of the computers to ensure that he makes the proper amount of profit. Furthermore, Glen has recently received a job to set up a large office space. He estimates that he will need 25 computers at a cost of $600 a piece. In addition, Glen will need to set up the company software in the building. The cost of the software to run all the computers is around $2,000. If Glen wants to earn the desired 20% markup percentage for the job, then what will he need to charge the company?

(Looking for more examples of markup? If so, then click here to access a retail markup example.)

Step 1

First, Glen must calculate the total cost of the project which is equal to the cost of software plus the cost of the computers. Find the markup percentage calculation example below.

$2,000 + ($600*25) = $17,000

Step 2

Then, Glen must find his selling price by using his desired markup of 20% and the cost calculated for the project. The formula to find the sales price is as follows:

Sales Price = (Cost * Markup Percentage) + Cost
or
Sales Price = ($17,000 * 20%) + $17,000 = $20,400

In conclusion, Glen must charge the company $20,400 to earn the return desired. This is the equivalent of a profit margin of 16.7%. For a list of markup percentages and their profit margin equivalents scroll down to the bottom of the Margin vs Markup page, or you can find them using the above markup formula. Using what you’ve learned the markup percentage calculation, the next step is to download the free Pricing for Profit Inspection Guide. Easily discover if your company has a pricing problem and fix it.

markup percentage calculation, Markup Percentage

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markup percentage calculation, Markup Percentage

See Also:
Margin vs Markup
Margin Percentage Calculation
Retail Markup
Gross Profit Margin Ratio Analysis
Operating Profit Margin Ratio Analysis

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106 Responses to Markup Percentage Calculation

  1. Drew December 26, 2014 at 9:48 am #

    Your example of markup % for Glen at the computer company is wrong. He will not earn a 20% markup over cost.

    The correct amount would be $21,250 – NOT $20,400.

    The proper formula would be:

    Computers (15,000) + Software (2,000) / (1 – .20 (Markup %) = $21,250.

    • Patel January 19, 2015 at 4:55 am #

      Yes, the correct ans is $21,250.

      the Calculation on Calculator is $2000+ $600*25 = $17000/.80 =$21250.

      • Tsundzukani NONYANE Xolani October 14, 2015 at 1:27 am #

        That’s correct, I just re calculated, I also get the $21250

        • joe March 8, 2018 at 10:39 pm #

          Same

          • joe March 8, 2018 at 10:40 pm #

            Same

      • Cee April 8, 2016 at 9:04 pm #

        I agree with Patel. However, in the example given in the exercise, I think it was only human error of mistaken percentage, which should have been 25% instead of 20%.

    • Clint May 4, 2015 at 2:06 pm #

      Drew isn’t actually correct.

      The article is talking about how markup of costs to price.
      Drew is talking about what percentage of sale price is then profit.

      A 20% markup only gives 16.7% profit on the sale price.

      Or to rephrase, the article is saying 20% markup is 20 cents on the dollar, whereas Drew would have you charge 32 cents on the dollar to have your profit be 20% of what you charge, rather than 20% of your costs.

      • Nomfundo November 2, 2017 at 12:43 am #

        If selling price is 40 000 and cost price is 32 000 what the mark up?

        • Josh November 29, 2017 at 7:42 am #

          56.25%, profit divided by cost times 100.

          • numan February 25, 2018 at 6:23 pm #

            25%

        • abdul hassan March 16, 2018 at 9:40 am #

          25%

          • Ana November 2, 2018 at 7:57 am #

            25% is right…

      • Tshewang May 9, 2018 at 9:01 am #

        A kilograms of beans has a cost price of NU40 and a selling price of NU55. What is the percent markup?
        The ans is 37.5 but how should we get it.

    • SujayV June 2, 2015 at 11:33 pm #

      Incorrect. Your formula is for Margin and NOT markup.

    • rommel February 16, 2016 at 4:56 am #

      what is the answer for;

      find the cost of a pair of shoes sold for 1480.00 if the markup was 25% of the cost.

      • Cee April 8, 2016 at 9:14 pm #

        Following the exercise example, using same 25% markup, I think your selling price will be $1,850. See calculations below.

        ($1480*.25)+$1480
        =$370+$1480
        =$1850

        • James July 19, 2016 at 4:52 pm #

          You just marked up a price that was already marked up. The list price was $1480. Which is 25% More than the cost to the supplier. You just marked that $1480 up 25% more. Your $1850 is $666 more than the actual cost of the shoes. The COST is $1184, marked up 25%. 25% of $1184 is $296. $296+$1184=$1480. I did the COST+MARKUP=LIST (sale price). You did MARKED UP+ MARKUP= OVERPRICED. You just made the Markup now 77.78% from cost, with a GPM of 64%

      • numan February 25, 2018 at 6:24 pm #

        1184

    • Rajeeb Moidunny July 19, 2017 at 2:17 am #

      Margin % = ( Retail – Cost )/Retail,
      Retail = Cost / ( 1- Margin%)
      Cost = Retail * ( 1- Margin %)

      • Tom Sawyer September 14, 2017 at 4:42 am #

        No. Margin % is (Retail – Cost)/Cost, making Retail = Cost * (1+Margin %).

        Under your model, if your markup was 100%, eg. you charged double the cost as your retail price, equation would make the retail price infinite.

    • NIGGUH October 10, 2017 at 6:47 am #

      DREw this is not calculating margin because it is marked up of a price not the margin

    • Willie October 18, 2017 at 6:22 am #

      How do i calculate mark up % if i have the selling price and the cost of goods?

      • numan February 25, 2018 at 6:27 pm #

        (selling price – cost price) /cost price

    • Sydney December 29, 2017 at 8:51 am #

      Can you guys explain further because i’m getting $20,400.00

    • Jeffrey January 11, 2018 at 12:36 am #

      Hi, this not relating to the problem above, I just need some help here.

      How do i work my way around this? A company’s got a 23% mark-up for one of its customer, the boss wants a quote for a particular item sent to the customer not exceeding K5250.00.

    • Berly August 11, 2018 at 10:48 pm #

      I think your calculation is wrong. It’s mark up not margin. Mark up based on cost.

  2. Peggy January 14, 2015 at 2:57 pm #

    Drew is absolutely right. If you subtract 20% from 20,400, you get a net of %16,320. Glen would be losing profit! Not sure I can trust any of your other calculations – this is a gold standard.

    • DAn October 26, 2017 at 7:33 pm #

      To get the selling price you divide by .80 to get a 20% profit on the selling price.

  3. jodi January 25, 2015 at 10:31 am #

    How do u calculate the mark up if u are given the cost of sales and sales amounts

    As well as how do u calculate the cost of sales if sales n mark up given

    • Ajit March 14, 2015 at 8:37 am #

      All of you are right.

      Glenn is correct as he will get 20% mark up on cost but will get only 16.66 on sales.

    • Sylwia April 7, 2015 at 3:22 pm #

      Gross profit/Cost of sales= mark up %

      Sales- Cost of Sales = Gross Profit

      • numan February 25, 2018 at 6:31 pm #

        you are right

        gross profit/cost of goods= markup %
        and
        gross profit/sales =gross profit %

  4. Paul March 8, 2015 at 7:34 pm #

    You are all in fact wrong

    $20,400 is 20% mark up
    $21,250 is 20% margin

    • rommel February 16, 2016 at 4:57 am #

      find the cost of a pair of shoes sold for 1480.00 if the markup was 25% of the cost.

      help me to find the cost!! pls

      • Wallace Smallwood April 3, 2016 at 4:23 pm #

        $1,184 or $1,480/1.25

    • R B Easwaran November 13, 2017 at 2:52 am #

      Paul, you are right…The 20,400 is technically called markup and the 21,250 is gross profit margin. The original author has correctly mentioned that a 20% markup gives only a 16.7% gross margin. Mathematically, markup percentages are larger than gross margin percentages. Also, if I am not mistaken, it is the gross profit margin that reflects on financial statements (correct me if I am wrong). Without going into the nitty-gritties of accounting terminologies, suppose the cost of a product is $100 and I want a 20% markup, on cost I would fix a price of $120. However, using the markup formula it would be cost/(1-desired margin on sales) (ref: Philip Kotler’s marketing management book), i.e. 100/1-0.2 which will give me a markup price of $125. Looking at this purely from a marketing perspective, whether I go to the customer with a quote of $120 or $125, the customer is going to negotiate and bargain. I prefer to go with a price quote of $125 which gives me a markup of 25% on cost or 20% on sales and even if the customer bargains and I give him a $5 discount, I end up with $120 that gives me a markup of 20% on cost though my gross profit margin may come down to 16.7%. You an imagine what would happen if I went with a quote of $120! None of the writers here have considered this marketing aspect. Also, we must remember that what the customer sees is the price quoted and not the cost to company.So, from a marketing perspective, it is always better to calculate the markup price using the formula given: cost/(1-desired return on sales)!!!!

  5. Jess March 23, 2015 at 3:36 pm #

    Whenever I must calculate price given the mark up I use a formula that is easiest for me to remember which is
    cost*(1+20%)=price excel calculates it best but if that isn’t possibly it’s the order I do the math which would be 1+20%= .20 (or just move the decimal over to the left 2 spaces) then multiple cost by .20

    Though, I must say your formula may be a little easier to remember, and although your calcualtion is incorrect the formula still works……:
    Sales Price = ($17,000 * 20%) + $17,000 = $20,400
    17000*20%=$4,250
    $4,250+$17000=21,250

    It appears that your markup in this scenario is actually 19.99999%, didn’t know .00001% makes a difference on 17000.00

    • Kaori July 17, 2017 at 11:14 pm #

      What is that markup ? How do we know about mark up percentage?
      Can you calculate this please, find its cost price :
      Medicine sale MRP-24.46
      Quantity-50
      Rate-5.50
      CGST6% and CGST AMT- 16.5
      SGST6% and SGST AMT- 16.5
      TAX-12%
      Medicine sold amt-rs. 275

      • Sydney December 29, 2017 at 8:55 am #

        Can you guys explain further because I’m getting $20,400.00. Isn’t $4250 25%?

  6. Tony May 8, 2015 at 1:18 pm #

    This is all nonsense. In the real world, It’s a lot easier to calculate how much gross sales is needed to cover COGS and variables, then price my product at the market rate. If I can’t make sufficient cash flow based on the market price charged by competitors, and can’t lower my COGS and/or variables to make a profit, then the business model isn’t viable.

  7. rossy July 10, 2015 at 3:42 am #

    calculate the mark up on cost % and mark up on price % of the product that has price of $ 20 and marginal cost of $ 2

  8. ajit July 26, 2015 at 11:00 pm #

    all of you r wrong i am the international accountant in Usa

  9. Sibongile August 6, 2015 at 2:12 am #

    Please help: what is the formula to calculate
    Cost price and selling price when mark up percentage and profit is given.
    Thank you

    • Aftab Khattak August 26, 2015 at 3:01 am #

      1- Sales = $ 918,000
      Markup = 20%=0.20
      Cost of sale= ?
      Cost of sales formula = Sales / (1 + markup)
      Cost of sales = 918000 / (1+0.20)
      = 918000 / 1.20
      = $ 765000

      2- Markup= 20 %
      Profit = $ 153,000
      Selling price = ? Cost price = ?
      First we calculate the cost price:
      Just think if the profit is 153,000 that is the 20 % of cost price. The other 80 % is your cost of sales.
      20 % of cost price is……………. $153000
      100 % of Cost price ………………?
      Now do cross multiplication:
      =(153000 x 100 %) / (20%)
      Cost price = $ 765000

      for calculating selling price, we have formula;
      Gross profit = selling price – Cost price
      so selling price= Gross profit + cost price
      =153000 + 765000
      = $918000

      • Aftab Khattak August 26, 2015 at 3:09 am #

        selling price = cost price x (1+ markup)
        = 765000 x 1.20 = 918000

        • SAQIB HUSSAIN September 4, 2016 at 2:43 am #

          really helpful… Jazak ALLAH

      • Lukasz March 21, 2016 at 11:03 am #

        In your first example, the gross profit would be 153K, is that right? Then, from which I deduct the all variable cost I have to run my business to see whether based on the sales volume (918K) I make profit or losses, is that right?

        I would very appreciate for your answer.

        Thanks

  10. Ashraf August 29, 2015 at 8:23 am #

    If I know selling price and profit margin then how can I calculate cost of the product

  11. Vesna August 30, 2015 at 9:25 pm #

    Please HELP!
    how to determine total cost of providing the service and the invoice cost (to customers) at cost plus 50%.
    Data given for budgeted cost for service for next year:
    Direct costs (600.000 including labour cost of 200.000)
    Indirect costs: 300.000
    Total Costs: 900.000

    Actual direct cost for June were: 60.000

    Thank you

  12. ottis September 11, 2015 at 9:28 am #

    the answer is correct
    remember markup is addition to the cost to get sales value
    the cost of the product is 100% plus the markup of 20%
    so the sales price will be equal to (17000*20) +17000=3,400+17000
    =20400.
    any cost price given is 100% don’t forget

  13. bair October 6, 2015 at 5:05 pm #

    Most of you are right with your answer depending on how it is worded. What has been said is true based up what you’re being asked to calculate.

    If the question is, “I want you to markup up the product to achieve a 20% margin,” then you take the cost and divided it by 1 minus 20% (1 – .20)

    If the questions is just markup the product by 20%, then take the 20% times the cost, plus the cost.

    In reality I’ve never heard of a retailer (38 years doing retail) that doesn’t look at margin, when they are talking about markup, meaning they want to “earn” 20% on the sales price after costs. The need to compute “margin” when marking up a product is especially relevant when you start mark it down. When you know a product has a markup of 20% (margin) you know you can only mark it down to 20% before you start to take a loss. So if you mark up a product to achieve a 20% margin, when you mark it down 20% you are at zero. If you were to mark down an item 20%, that you only “marked up” using the formula first given, you’d end up with a negative margin of $680 [(20,400 x .8 = 16,320 ; (16320-17000=-680)]

    Hope this makes since, and that you’ll always “markup” you product to compute margin.

    • Wasteoflife September 16, 2016 at 7:21 pm #

      Actually, if you mark up a product by 20%, you can only mark it down 16% before taking a loss.

      $100 + 20% = $120
      $120 – 20% = $96

  14. Tsundzukani NONYANE Xolani October 14, 2015 at 1:30 am #

    The correct answer is $21250,

  15. wellington ncube October 25, 2015 at 12:40 pm #

    mark-up =profit \cost

  16. Marina Agustina November 3, 2015 at 11:27 pm #

    Mark Up calculation for Glen’s case is correct….

    Lets make it simple using easier numbers.

    If you have a product with $5 cost and you would like to put 50% mark up the sale price would be $7.5 ($5 the cost + half of that $5 which is $2.5)

    So with the same formula given in this Case for Glen Story, it will give the same result:

    (Cost * Markup Percentage) + Cost =Selling Price

    ($5 x 0.5) + $5 = $7.5

    You can also try with 100% markup, if it easier to understand as it is obvious the sale price will be $10 (as you know 100% of $5 is $5) and again use the same formula it will give you the same result.

    ($5 x 1) + $5 = $10

    BUT keep in mind, the profit Margin is only 50%, completely different to 100% which is the markup.

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  18. Z. Khan February 4, 2016 at 10:02 am #

    In simple terms, if you “markup” 15% over $100
    The correct answer is:
    $100X1.1765=$117.65

    Let’s do reverse calculation:
    $117.65X.15%=17.65
    or
    $117.65-17.65=$100

    In short, Markup or over a given number, the actual percentage is more (it’s not 15% but it’s 17.65%) in reality.

  19. Bud April 18, 2016 at 3:23 pm #

    This is by far the most confusing thread I have read today…lol!

    Every person has said: “Let’s keep it simple”…followed by confusing and non-simple calculations… 🙂

  20. Yomomma April 19, 2016 at 5:55 pm #

    The reason it’s confusing is because people are using the terms markup and margin incorrectly.

    Makeup percentage is the increased percent of the cost and a simple calculation of cost x markup percent to equal price. …which is what this article was originally focussing on.

    Margin (or margin percentage) is the profit as a percentage of the sale which what most business are concerned with. Its profit (price minus cost) divided by the price.

    • Joe November 13, 2016 at 10:42 am #

      I am a remodeling contractor and here is what I use as a formula for arriving at a dollar amount .can you tell me if I am right in my calculations.
      If I do a job at cost + 20% ,I calculate each item this way ,then total all items together at the end for overall job cost.
      So to get my amounts I do this
      $10.00 board + tax=$10.98×2 =$21.96×.20=$4.39 +$21.96=$26.35 ,total cost of board to customer.
      Thank you Joe

  21. Albert Einstein III April 22, 2016 at 1:30 pm #

    If a stock goes from $50 to $100 you doubled your money if you bought at $50, and is a $50 gross profit on the trade if you sold at $100 = 100% markup

    Consequently, if you shorted the same stock for $100 (Sell first then buy it back later) and it slides down to $50 and you buy it at $50, you have a 50% gain on your trade.

    In first example cost is buying at 50 and sale is selling at 100. and profit is 100%. Cost is the absolute value know and used as the comparison to sale price of $100. In second example Sale Price is the absolute value and used on comparison to cost price of $50. Moral of story is your percent derived from cost will be higher than percent derived from sales price. When calculating percents from two different numbers working from either cost to sales or sales to cost.

    • Nikola Tesla April 22, 2016 at 1:34 pm #

      I agree with you Albert. That is why short selling stocks is a bad thing.

  22. JaiJai May 24, 2016 at 9:21 pm #

    Hahaha! Thanks guys for the most confusing conversations and examples. But it’s a great exercise!

    I think it would be much easier if everyone just focuses on ONE example before throwing in another new one.

    Focusing on original Glen’s example, the author IS right!!

    Let’s make it simple:
    Cost 17,000, to achieve 20% markup, selling price should be 20,400(17,000+20%), which is also 16.67% of profit margin(3,400/20,400);

    However, in order to achieve a 20% of profit margin, then cost of 17k is only 80% of the total selling price, which should be 21,250(17,000/0.8).
    Let’s reverse: 21,250-20%=17,000.
    That was why the above:

    “Peggy January 14, 2015 at 2:57 pm #
    Drew is absolutely right. If you subtract 20% from 20,400, you get a net of %16,320. Glen would be losing profit! Not sure I can trust any of your other calculations – this is a gold standard”

    Peggy, when you Add 20%,on 17,000, that’s markup on cost, but when you subtract 20% from 20400, that’s margin of 20% on selling price.

    Therefore, only Paul is right!
    Paul March 8, 2015 at 7:34 pm #
    You are all in fact wrong

    $20,400 is 20% mark up
    $21,250 is 20% margin

    Key issue here is to unify the terms: markup or margin. My understanding is that “Markup” is the profit on cost, whereas “Margin” is the profit on selling price. Am I correct?
    Thanks for reading……
    Regards
    JaiJai

    • Panos October 11, 2018 at 5:57 pm #

      👏🏻👏🏻👏🏻👏🏻👏🏻
      By far the best explaination I’ve read so far and most clear…..and I read almost every comment.
      Well said and thank you!

  23. TCO03 June 15, 2016 at 10:45 am #

    JaiJai and Yomomma are right!

  24. Cella June 15, 2016 at 11:43 pm #

    Does anyone know how to calculate the SELLING PRICE based on 100% markup. if given cost amount ($358) and Total Sales (how much i paid to my supplier)=$22076 and Freight= $509.33. I calculated the cost price including the freight and all is about $184.10 (is this value considered as CIF price?.

  25. max July 5, 2016 at 3:53 am #

    Yeah, it was indeed a real confusing thread I have ever read…lol.

    JaiJai’s analyse and calculation is absolutely correct. As agreed with JaiJai, only Paul got it right as he understood the difference between “MARKUP” and “MARGIN” in what this article trying to relates.

    Yomomma has also provide the correct formula for the “MARGIN” calculation too, just need to multiply 100 after divided by the (sales) price.

    Kudos to you guys!

  26. Alex Valdes July 12, 2016 at 12:46 pm #

    In my opinion the easiest way to do it is like this:
    In excel: =((Cost*20)/80)+Cost or =((17,000*20)/80)+17,000: 21,250

  27. David July 26, 2016 at 3:11 am #

    here is an easy formula:

    (sell price – cost price)/cost price x 100 = MARKUP %
    (sell price – cost price)/sell price x 100 = MARGIN %

    • Hardmac August 10, 2016 at 7:19 am #

      When we say our SP has a profit margin of x%:

      The profit can be calculated as

      P = x% of SP

      => SP – CP = x% of SP (P can be substituted by (SP – CP) )

      => SP – (x% of SP) = CP

      => SP(1 – x%) = CP

      => SP = CP/ (1-x/100)

      Now apply this to the above question and see.

    • cornelius October 11, 2016 at 4:19 am #

      this is wrong…mark up =profit/selling price and margin=profit/cost price

  28. Sessi August 17, 2016 at 9:45 pm #

    This makes understanding mark up and margin easier. Mark up is on cost meaning cost is 100%. Margin is on sells meaning sells is 100%.
    Hence SP-CP=P
    120%-100%=20%
    The rest is mathematical work. Hope this made it easier for you..

  29. Zel Mortel August 30, 2016 at 4:27 am #

    Hey Guys! I just want to ask what is the best way to compute the total value for freight based on 4% (target freight percentage )

    EXAMPLE :
    TOTAL BUYING PRICE @ 13% : $282,000
    TOTAL SELLING AMOUNT : $ 332,000

    SIZE OF CONTAINER : 1X40 MAXIMUM ESTIMATED FREIGHT BILLING : $5,300

    DECLARED /TARGET PERCENTAGE FOR FREIGHT CHARGES IS : 4%

    1) What is the best formula to compute if the content of the container is okey meaning no loss?
    2) How to calculate the total amount for freight charges considering that target percentage for freight is 4%?

    Thank you !

  30. malou medina September 8, 2016 at 10:55 pm #

    may i seek your help on this problem:
    If the mark up rate on selling price is 100% what is the cost rate?

    thanks for the assistance

  31. confuse October 4, 2016 at 10:28 am #

    the mark up price of camera is 3/2 of the cost price and selling price is 9/10 of mark up price. find the percentage profit or loss ?

  32. lebogang October 23, 2016 at 4:39 am #

    Help me on this one guys.. The following pricing is used by a retailer. Calculate the % mark-up for the product sold. Show all calculations. Retail price is R499.95 and cost price is R139.95

  33. Drew January 11, 2017 at 2:51 pm #

    Wow – Can’t believe how much discussion this sparked since my first comment! It looks like everybody but Peggy and I still have it wrong… Just ran into this with another Sales Rep who ALSO is incorrectly calculating markup @ work.

    If you want to achieve a 20% MU on a $10 item, you would SELL the item for $12.50. You would NOT sell it for $12.

    Correct Formula: 10 / (1-.20) = $12.50
    Incorrect Formula: (10 x .20) + 10 = $12.00

    Don’t believe me? Find a simple calculator and type in ’10’ ‘X’ ’20’ ‘MU’. You’ll get $12.50.

    It’s astonishing how many people don’t understand simple business math.

    • Tristan May 9, 2017 at 6:03 am #

      you are using 25% bro…. press 10 x 1.25= 12,50 that is 25%… press 10 x 1.20=12.00
      press 10 + 25% = 12,50 and press 10 x 20%= 12.00……….. is the calculator lying?

  34. Mohamed Haggag January 17, 2017 at 8:23 am #

    It is a right calculation based on the following equations:

    1) Markup=(selling price/total cost)-1
    So, Markup=(20,400/17000)-1
    = 0.2 or 20%

    2) Markup=(selling price-total cost)/total cost
    =(20,400-17000)/17000
    =0.2 or 20%

  35. Baljinder Sunner February 5, 2017 at 7:59 pm #

    describe how to find the selling price of an item that has been marked up by 110%

  36. Manny March 15, 2017 at 3:35 pm #

    This the formula that I know your cost is $100 and your retail markup is 35% this is what you do 100÷ .65 =$153.84 the markup will give you, your $35 profit and extra for your expenses,

  37. Emioluwa Ebiwonjumi March 21, 2017 at 2:29 pm #

    this is confusing i don’t understand one thing what are you saying can you please break it down i’m only in seventh grade for pete’s sake everyone’s just throwing in their own i don’t get anything

  38. Kobie March 27, 2017 at 12:33 am #

    1480 is the selling with a markup of 25%
    That means the selling price = 125% of the cost.
    1480 = 125%
    x = 100%

    x 100
    _____ = ______
    1480 125

    x = 1480 X 100
    __________
    125

    = 1184 THe original cost before markup was $ 1184

    ———–>

    Test:

    1184 * 1.25 = 1480 which means calculation is correct

  39. Kobie March 27, 2017 at 12:33 am #

    Have a good day.

  40. Kobie March 27, 2017 at 12:36 am #

    The spacing is modified with upload which makes the maths unreadable. Sorry!

  41. MEL CHAFFEY March 31, 2017 at 5:27 pm #

    what is the mark up percentage of productsa sold within a milk baR PLEASE?

  42. MEL CHAFFEY March 31, 2017 at 5:29 pm #

    sorry forgot to add in Australia… what is the percentage markup for products sold within a milkbar?

  43. kusalni May 9, 2017 at 12:27 am #

    hi can you help on how to answer the igcse edexcel accounting 2016 june question 12 (mark up part)

  44. Tristan May 9, 2017 at 5:57 am #

    Hi Guys… am a sales rep with 10 experience. Drew is wrong, very wrong and you can get fired for that, lol.. just joking, well Drew’s method is using 25% and not 20%, its a skill used by greedy sales rep working on commission… well i hope this my example will help you out…. easy!!!

    For my calculation examples I am going to use a psychological selling price of $20400
    My cost price $17000

    Mark-up Percent
    As we know our cost and selling price, we want to know the mark-up percentage we get.

    Mark-up Percent=(Selling Price-Cost Price) ÷ Cost Price
    Mark-up Percent = ($20400 – $17000) ÷ $17000
    Mark-up Percent = $3400 ÷ $17000
    Mark-up Percent = 20%

    Selling Price
    Should we not have the desired selling price but we know we sell all our products for a 20% Mark-up:
    Selling Price = Total Cost x (1 + Mark-Up Percent)
    Selling Price = $17000 x (1 + 0.20)
    Selling Price = $17000 x (1.20)
    Rounded Selling Price = $20400

    Gross Margin Percent
    Changing the Mark-up Percentage calculation slightly to the Gross Margin Percent calculation:
    Gross Margin Percent = (Selling Price – Cost Price) ÷ Selling Price
    Gross Margin Percent = ($20400 – $17000) ÷ $20400
    Gross Margin Percent = $3400 ÷ $20400
    Gross Margin Percent = 16%

    Mark up and Gross Margin, not the same thing!

    Thanks.

  45. Kip July 27, 2017 at 9:39 am #

    I’m preparing to have a meeting with our sales staff to discuss this exact topic and stumbled upon this rather old article with rather recent comments. Normally I wouldn’t resuscitate such an old thread; but, while the math is sound the last comment may give the inexperienced the wrong idea about using margins in price setting.

    Let me put my tongue in cheek and describe it this way. I’m the owner of a company, I have taken on risk and have a lot invested in my company so my goal is to make a 20% profit margin at the end of the year. We need the 20% to pay for; increases in raw material costs, higher wages for our employees, a critical expansion in order to keep our company competitive and hopefully a return for me the investor.

    I have two salesmen, let’s call them Drew and Tristan. They both have to move $17,000 worth (cost) of product for the year and have some latitude in pricing.

    Drew uses the formula: cost / (1 – .20) = sales price.
    Drew is new to sales but manages to hit his sales goal for the year. He is hungry and his sales are based on the merits of the company and he is able to differentiate our product in a meaningful way from our competitors.

    Tristan uses the formula: cost * (1 + .20) = sales price.
    Tristan is a seasoned veteran and also hits his sales goal for the year. Tristan has been at the game for a long time, he is tired and he bases most of his sales on price point.

    Here is how the company did:
    $41,650 in revenue, $7,650 in profit (41,650 – 34,000 = 7,650) for a profit margin of 18.37% (7,650/41,650).

    Not bad but we did not hit our profit margin goal…time to look at the financials. Expenses are all within budget. Let’s take a closer look at sales.

    Drew’s sales $21,250, $4,250 in profit for a profit margin of 20%. Nailed it.

    Tristan’s sales $20,400, $3,400 in profit for a profit margin of 16.67%. Fell short.

    I know who I’ll fire if I have to make staffing decisions 🙂

    Drew’s method has nothing to do with greed. It is simply using the end goal to set pricing in a very easy to use formula.

    This thread perfectly demonstrates the pitfalls in thinking when it comes to margins, markup and price setting. Thank you all past and present for this discussion it has given me a great direction in which to take my meeting.

  46. Joven August 14, 2017 at 4:06 am #

    Hi.
    Selling price = cost + mark up
    Selling price = cost + margin

    These are the basic computation to compute the selling price.
    Assuming based on the data
    “Glen has decided that he would like to earn a markup percentage of 20% over the cost of the computers to ensure that he makes the proper amount of profit.”

    The statement is very clear that the basis of mark up is BASED ON COST not BASED ON SELLING PRICE. =
    The cost of $17,000 + mark up of 20% of COST that is $3,400 = $20,400 selling price.

    but if the statement shows the margin is 20% it means that is BASED ON THE SELLING PRICE not BASED ON COST so the answer will be different.
    The cost of $17,000 which is 80% of the selling price + $4,250 which is 20% of the selling price = $21,250 that is 100%.

  47. Sean August 26, 2017 at 1:55 am #

    Just take 17,000 and divided by 0.80 you get 21,250

    0.80 20%
    0.70 30%
    0.60 40%

  48. Kellie September 2, 2017 at 8:05 am #

    Hi, I need to determine how to keep a retailer margin % whole while running a promotion – funding needed to keep retailer margin % whole given sale price.

    Example:
    Product cost to retailer :$10
    Product margin: 30%
    Normal selling price $14.29

    Please provide the calculation to determine how much we would need to fund to keep the retailer margin % whole given the promo sale price and fund the markdown.

    Thanks !!

  49. raphael September 24, 2017 at 5:28 pm #

    The following data are available: • Annual fixed costs: $12,000,000 • Variable costs per unit: $11.50 • Expected annual output level: 500,000 • Competitors’ prices varied from $60 to $100 (although most were at least 12 months old). If the company uses full-cost pricing using a mark-up of 50% on total unit costs, calculate the price to be charged for ‘Storm Trooper’. (a) What adjustments would you seek to make should the pricing appear to be ineffective?

  50. Henry October 25, 2017 at 10:10 am #

    Glen is correct the 20% Mark up is on cost

    you can also use this formular $17000(1+20%)

    $17000(1.2)

    $17000*1.2= $20400

  51. Folusho November 24, 2017 at 10:19 am #

    I bought a pair of book for #22.00 and make profit of 22%.. What is the selling price?

  52. Tina November 24, 2017 at 1:33 pm #

    Thank you to yourself and the few others who clarified this. So many ppl don’t know the difference between markup and margin and they’re only confusing those who read this article trying to learn. The Glen example is correct. Those who said it is not are calculating MARGIN which IS NOT what the example was calculating. And the article’s author clearly stated what the margin would be in relation to markup.

  53. Al February 6, 2018 at 2:53 pm #

    Tina you hit the nail on the head. These people are just so quick to try to find mistakes in what was originally said but yet they do not know the difference between a profit MARGIN percentage and a MARKUP percentage.

    Markup percentage is nothing more than the ratio between the selling price and the cost of the item. When the profit margin is the ratio between PROFIT and TOTAL REVENUE. The two are very rarely the same.

    This guy was merely trying to show that the Markup percentage does not equal the Profit Margin.

  54. Gregg February 20, 2018 at 4:20 pm #

    what is the formula to calculate wholesale selling price when retail price is known, and retail initial marku are know?

    Thank you,
    Gregg Solomon
    New York

  55. hunter March 1, 2018 at 12:50 pm #

    if you have chocolate bars at a price of $24 per dozen and sell them for $3 each what would be the markup percent?

  56. Leo March 19, 2018 at 12:11 am #

    5. Gross profit is 25% of cost price. If selling the price of an article is $ 285.00, what is (a) cost price (b) gross profit? ( Ans first I times 285*25 them ÷ by 100 equal A answer is 71.25 then B I plus 71.25+ 285 = 356.25) think he said this was wrong too

  57. sudheesh May 1, 2018 at 1:07 am #

    I need an answer ,

    My sales price: 41400
    Commission: 10%

    I need the markup value: ?

    Plz provide simple calculation steps

  58. manasa g June 25, 2018 at 3:02 am #

    what is the markup percent for software business?

  59. Annalyn Lacerna June 27, 2018 at 7:36 am #

    A construction supply recognizes a mark up of 345 if it sells paint at a mark up of 30% of the selling price.
    a. Find the regular price of the paint, cost and rate of the mark up based on cost.?

    b. Suppose the overhead expenses are 15% of the cost, how much should the price be to break even?

    c. If the paint is sold for 700, how much is the profit or loss?

    Need Help Please

  60. SK August 3, 2018 at 1:44 am #

    Hi,

    I am trying to write out the formula to work out the cost price, if selling price of $750 and markup of 120% is known. Cost price and profit margin needs to be calculated

    Thanks

  61. Aron Coppock September 28, 2018 at 7:52 am #

    With thanks! Valuable information!

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