Calculator Use
In sales, it is often necessary to calculate the selling price based on the known cost of an item and the desired gross margin of the store or company. You can calculate the selling price you need to establish (revenue) in order to achieve a desired gross margin on a known product cost. Also, will calculate mark up percentage on the product cost and and, the dollar value of the gross profit. Enter the original cost and your required gross margin to calculate selling price, mark up and gross profit. This calculator is the same as our Mark Up Calculator.
* Price (or Selling Price) = Revenue
This calculator shows the steps in solving the formulas to arrive at the calculated values for Revenue, Gross Profit and Mark Up.
Price Formulas/Calculations:
- To calculate the selling price or revenue R based on the cost C and the desired gross margin G, where G is in decimal form:
- The gross margin is the Profit divided by the selling price or revenue R
- So, the gross profit P is the selling price or revenue R times the gross margin G, where G is in decimal form :
- The mark up percentage M, in decimal form, is gross profit P divided by cost C.
- M = P/ C
- M * 100 will change the decimal to a percentage.
Example Price Calculation
Given the Cost C of an item is $125.00 and the desired Gross Margin G is 75%, calculate Revenue R, Gross Profit P and Mark Up.
\[\text{Revenue} = \frac{\text{Cost}}{1 - \text{Gross Margin}}\] \[\text{Revenue} = \frac{125.00}{1 - 0.7500}\] \[\text{Revenue} = 500.00\]
\[\text{Gross Profit} = \text{Revenue} \times \text{Gross Margin}\] \[\text{Gross Profit} = 500.00 \times 0.7500\] \[\text{Gross Profit} = 375.00\]
\[\text{Mark Up} = \frac{\text{Gross Profit}}{\text{Cost}} \times 100\] \[\text{Mark Up} = \frac{375.00}{125.00} \times 100\] \[\text{Mark Up} = 300.00\% \]
FAQs
To calculate the price per item, follow these steps: Find the total cost of the items. Count the total number of items. Divide the total cost by the number of items to calculate the cost per item.
How accurate is the net price calculator? ›
They're not all completely accurate
Institutions use different information and formulas to calculate net price, and some use out-of-date costs. Net price calculators also don't include talent-based aid, such as scholarships for athletics or fine arts, and may not include merit-based aid.
Do calculators ever make mistakes? ›
While these can of course be quite helpful, they also need to be handled with care, because they make systematic mistakes (such as rounding mistakes). Thus, a good intuition of the underlying domain is still required to make good use of them.
How do I know if my calculator is accurate? ›
So, to determine if a calculator is accurate, you simply need to know the true value of a calculation, then compare that to the answer of the same calculation that the calculator makes . Put simply, we all know that the true answer to 2+2 is equal to 4.
What is calculator trick? ›
Choose a repeating 8-digit number (like 12,341,234) and divide it by 137. Divide that new number by the original 4-digit number—the answer will always be 73. Pick a number between 1 and 9 and multiply it by 9. Multiply this new number by 12,345,679 to get a repeating string of your original number, like 111,111,111.
What is the formula for calculating price? ›
Divide the total cost by the number of units bought to obtain the cost price. Use the selling price formula to find out the final price i.e.: SP = CP + Profit Margin. Margin will then be added to the cost of the commodity in order to identify the appropriate pricing.
How to calculate cost price? ›
The calculation of the cost is done according to the direct and indirect expenses of your company. It must be determined for each product or service you offer. It is calculated by adding the direct and indirect expenses, then dividing the sum obtained by the quantity of goods produced or services rendered.
How is actual price calculated? ›
Actual Cost Calculation
Actual material cost = (Number of units of materials) x (Price per unit) Actual labor cost = (Total labor hours used) x (Salary of direct workers per hour) Actual overhead cost = Sum of all overhead expenses = Utility fees + Rent + Insurance.
How to calculate net price? ›
The net price formula is calculated as follows: Net price = Catalog price – Discounts.
How to find net price calculator? ›
Where to Find It. Each college's Net Price Calculator is located somewhere on the college's website. Check for it on the financial aid or admissions page, or use the homepage search feature to find out where it's located. You can also reference a list provided by U.S. News & World Report.
In economics, the net price definition is the final price paid for a product or service after all costs have been paid. Costs associated with a product can be operating expenses, maintenance, storage, and taxes. The net sales price is usually what a customer pays for a product.
Why am I getting math error on my calculator? ›
'Math Error', when the calculation you entered makes mathematical sense but the result cannot be calculated, such as attempting to divide by zero, or when the result is too large for the calculator to handle.
Why is my calculator doing trigonometry wrong? ›
Always check that your calculator is using the correct system of angle measurement before using trigonometric ratios. Your calculator is set to use degrees if the display indicator is shown at the top of the screen. If you see the indicator or , then your calculator is set to use different units for measuring angles.
Why is my financial calculator rounding? ›
Why is my BA II Plus rounding? The BA II Plus calculator comes with a 2 decimal places default setting. To stop the rounding, all you have to do is increase the decimal places, as detailed in the Recommended Calculator Settings section.
