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Calculate gross profit margin, markup percentage, revenue, and net profit for products or services.
Direct costs required to produce or acquire the item.
Final retail price charged to customers.
Gross profit: $60.00 per unit
Portion of revenue going to cost vs retained as gross profit
Comparing alternative pricing points for the same cost ($40).
| Selling Price | Gross Profit | Profit Margin | Markup |
|---|---|---|---|
| $80.00 | $40.00 | 50.0% | 100.0% |
| $100.00 | $60.00 | 60.0% | 150.0% |
| $120.00 | $80.00 | 66.7% | 200.0% |
| $150.00 | $110.00 | 73.3% | 275.0% |
| $200.00 | $160.00 | 80.0% | 400.0% |
Difference between Profit Margin (share of revenue) and Markup (percentage added on top of cost).
Product costs $40 to make and sells for $100.
Profit = $60. Margin = ($60 / $100) × 100 = 60%. Markup = ($60 / $40) × 100 = 150%.
60% Gross Margin, 150% Markup
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