# Markup Calculator

Markup Calculator coming Soon

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The markup calculator is a tool most often used in businesses to calculate the sale price. It is also used to calculate the cost to provide with revenue and markup. Markup percentage is a concept which is commonly used in managerial/cost accounting work. It is equal to the difference between the selling price and the cost of a good, this difference has to be then divided by the cost of that good. Markup percentages are useful in calculating the charge for the goods/services that the company provides to its consumers. A markup percentage is a number which is used to determine the selling price of a product in correlation with the cost of actually producing the product. Markups are a common term in cost accounting and it focuses on reporting relevant information to the management to make internal decisions that sit better with the company’s overall strategic goals.

## How to calculate markup?

Markup refers to the difference between the selling price and its cost. It is usually expressed as a percentage above the cost. It is the markup which provides the seller with a profit as it is added over the total cost of good. The formula for calculating markup percentage is:

Markup percentage= (sales price – unit cost )/ unit cost * 100

Example 01:
Product cost: \$500
Selling price: \$750
Markup percentage = (sales price – unit cost )/ unit cost * 100
= (750- 500) / 500 * 100 = ½ * 100 = 50%
So markup percentage = 50%

Example 02:
Production cost: 100
Selling price : 150
Markup percentage = (sales price – unit cost )/ unit cost * 100
= (150-100)/ 100 * 100 = 1\2* 100 = 50%
Markup percentage is 50%

## How do you calculate a 20% markup?

To calculate 20% markup you just need to multiply the original price by 0.2 or you can multiply it by 1.2 to find the total price.

If you want to know how much to add for 20 percent markup when you know the wholesale price, you must multiply the wholesale price by 0.2( 20 percent in decimal form). The resultant is the markup amount, which you should add

Example
Production cost: 500
Markup amount = 500 * 0.2 = 100
So the amount you can add is 100
Final price would be 500 + 100 = 600
Alternate way
Production cost: 500
Final price= production cost * 1.2
= 500 * 1.2
= 600

## Difference between markup and margin?

The key to setting prices that not only cover your expenses but also leave you with a profit is to calculate margin and markup. What is the difference between margin and markup? Lets see below

### Margin

A margin, or gross margin, is the revenue which you make after paying Cost of good Sold. To calculate margin, we will start with the gross profit (Revenue – Cost Of Good Sold). Then we will find the percentage of the revenue that is gross profit.

Percentage of revenue that is gross profit = gross profit / revenue.

Example
Selling price of a cloth is 200 Rs. You have produced each of this at 150 per piece.
Gross profit= revenue- cost
=200-150 = 50
Margin = gross profit/ revenue
= 50 / 200 rs= 0.25 margin
0.25* 100= 25% margin

This means you get to keep 25% of your total revenue while you spent 75% ( 100- 25) of the revenue.

This margin formula shows how much of every dollar in sales one keeps after one has paid the expenses. In the above margin calculation example, one keeps \$0.25 for every dollar one makes. The greater the margin, the greater the percentage of revenue one gets to keep when he makes a sale.

### Markup

Markups are different than margins. Markup shows how much more is your selling price than the amount the item cost you.

Just like a margin, to calculate markup, you need to with your gross profit (Revenue – Cost of goods cold). Then, find the percentage of the cost of goods sold, that is gross profit. You can find this percentage by dividing your gross profit by cost of goods sold

Selling price of a cloth is 300 Rs. You have produced each of this at 250 Rs per piece. Example
Gross profit= revenue- cost
=300-250 = 50 Rs
Margin = gross profit/ revenue
= 50 Rs/ 250 rs= 0.25 markup
0.25* 100= 25% markup

The markup is 25%. That means you sold the clothes for 25% more than the amount you paid for it.

The markup formula measures how much more one sells the items for than the amount he pays for them. In the markup example above, your markup is 25%. The higher the markup, the more revenue one gets to keep when he makes a sale

## Conclusion

Time is one of the most important assets, so we must take care of this asset. If you are taking help of online CAGR calculator or any other related devices, it is saving your timings, you must use it to get best result. So if you want the 100% correct result in seconds, you must use our calculator services which will provide you 100% perfect result and is also very easy to use.

### Disclaimer

While every effort has been done in developing this calculator, we are not accountable for any incidental or consequential damages arising from the use of the calculator tools on our web site. These tools serve to visitors as a free calculator tool. Please use at your own risk. The calculations provided are just a guide. You are advised to speak to a professional financial advisor before taking any financial decision.