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Selling Price Formula:
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Selling price calculation determines the final price at which a product or service should be sold to achieve desired profit margins. It includes the cost price plus a markup percentage that covers expenses and generates profit.
The calculator uses the selling price formula:
Where:
Explanation: The formula calculates the selling price by adding the desired profit (calculated as a percentage of the cost price) to the original cost.
Details: Accurate selling price calculation is crucial for business profitability, competitive pricing, financial planning, and ensuring sustainable business operations.
Tips: Enter cost price in USD, markup percentage as a decimal (e.g., 0.25 for 25%). Both values must be non-negative numbers.
Q1: What's the difference between markup and margin?
A: Markup is calculated as a percentage of cost price, while margin is calculated as a percentage of selling price. Markup focuses on cost, margin focuses on revenue.
Q2: How do I convert percentage to decimal for markup?
A: Divide the percentage by 100. For example, 25% becomes 0.25, 15% becomes 0.15.
Q3: What is a typical markup percentage?
A: Markup percentages vary by industry. Retail typically uses 50-100% markup, while services may use 20-50%. Consider competition and market conditions.
Q4: Should I include all costs in cost price?
A: Yes, cost price should include all direct costs: materials, labor, manufacturing, and any other expenses directly related to producing the product/service.
Q5: Can this formula be used for service pricing?
A: Yes, the same formula applies to service pricing. Calculate your time and material costs as the cost price, then add your desired markup percentage.