Markup Calculator

Calculate markup on cost price for overhead and profit.

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What is Markup?

Markup is the amount added to the cost price of goods to cover overhead and profit.

Markup is calculated as a percentage of the cost price to determine product pricing and ensure profitability. It’s crucial for pricing strategies, allowing businesses to cover costs and achieve profit margins.

Markup varies by industry, competition, and market demand. Luxury goods often have higher markups than everyday items.

Note that markup differs from margin: markup is based on cost price, while margin is based on selling price. Understanding both helps businesses make informed pricing decisions.

Markup Formula

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Cost Price} &= \mathrm{CP}\newline\text{Markup Percentage} &= \mathrm{MP}\end{aligned}\newline\bold{Calculate{:}}\newline\text{Selling Price} = \mathrm{SP} \newline = \mathrm{CP} \times (1 + \frac{\mathrm{MP}}{\mathrm{100{\%}}})\end{gather*}

Markup Calculation Examples

Example 1

A retailer purchases a product for $100. They decide to apply a markup of 20% to determine the selling price.

Let's calculate the selling price:

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Cost Price}\space(\mathrm{CP}) &= \mathrm{{\$}100}\newline\text{Markup Percentage}\space(\mathrm{MP}) &= \mathrm{20{\%}}\end{aligned}\newline\bold{Calculate{:}}\newline\text{Selling Price}\space(\mathrm{SP})\newline\begin{aligned}&= \mathrm{CP} \times (1 + \frac{\mathrm{MP}}{\mathrm{100{\%}}})\newline&= \mathrm{{\$}100} \times (1 + \frac{\mathrm{20{\%}}}{\mathrm{100{\%}}})\newline&= \mathrm{{\$}100} \times (1 + 0.2)\newline&= \mathrm{{\$}100} \times 1.2\newline&= \mathrm{{\$}120}\end{aligned}\end{gather*}

This indicates that the selling price of the product will be $120 after applying the markup.

Example 2

A small business buys a handmade item for $50. They want to sell it with a markup of 30%.

Let's calculate the selling price for this item:

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Cost Price}\space(\mathrm{CP}) &= \mathrm{{\$}50}\newline\text{Markup Percentage}\space(\mathrm{MP}) &= \mathrm{30{\%}}\end{aligned}\newline\bold{Calculate{:}}\newline\text{Selling Price}\space(\mathrm{SP})\newline\begin{aligned}&= \mathrm{CP} \times (1 + \frac{\mathrm{MP}}{\mathrm{100{\%}}})\newline&= \mathrm{{\$}50} \times (1 + \frac{\mathrm{30{\%}}}{\mathrm{100{\%}}})\newline&= \mathrm{{\$}50} \times (1 + 0.3)\newline&= \mathrm{{\$}50} \times 1.3\newline&= \mathrm{{\$}65}\end{aligned}\end{gather*}

This shows that the selling price of the handmade item will be $65 after the markup is applied.

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