Markup calculation??

Question

Could anyone please help and advise me how to calculate markup --

I.e. if Iam buying a product for $1.6875 and selling for $2.30..what's the margin percentage of profit..

Answer 1

You base your selling price on a mark-up figured ON the selling price. Your cited example is 26.848 % on your sales price  (not knowing your business I can't know if that's adequate.) The selling price method allows all your prices and expenses, etal, to be based on a projected year-end $-sales figure.  If this sales figure is modestly projected at $500,000. then ALL costs incl  profit, taxes, insurance, personnel, salary, cost of goods, etc. might come to $300,000.  Based on the sales figure, you need a 40% M-U ($200,000 mark-up on $500,000 on the sales prices.

A friend of mine carried essentially an imported inventory and along with his staff they priced these exotic items on a 'what will it bring' basis.  Some items were estimated at triple their purchase-price and sold!  Knowledge of your market can help you do this with some items.

Answer 2

25

Answer 3

selling price=$2.30

less cost=$1.6875

profit=$.6125

profit margin based on cost=$.6125/$1.6875

=36.30%