MARGIN % VS. MARKUP
A) Margin
%
If you know the desired gross margin
% that you wish to make on an item, then the following formula would be used to
help you to calculate the markup % to cost required:
((100 ¸(100 -
margin %)) - 1) x 100
For
example: 30 % desired margin
Markup
% = ((100 ¸(100 -
30)) - 1) x 100
= ((100 ¸70) -
1) x 100
= ( 1.42857 - 1) x 100
= .42857 x 100
= 42.857
Other
Examples: Margin % = Markup
%
20 25.000
25 33.333
30 42.857
35 53.850
40 66.666
45 81.818
50 100.000
B) Markup
%
If you know the markup % to cost
required, then the following formula will help you to calculate the desired
margin % :
(
markup% ¸(100 + markup% )) x 100
For
example: 40 % markup
Margin
% = (
40 ¸(100 + 40))
x 100
= .28571 x 100
= 28.571
Other
Examples: Markup % Margin %
30 23.076
50 33.333
60 37.50
70 41.176
80 44.444