What this calculator measures
Markup measures profit relative to cost, while margin measures profit relative to selling price. A product bought for $60 and sold for $100 has a 66.67% markup but a 40% margin. Using the wrong denominator can materially distort a pricing decision.
The calculator reports both measures, unit profit and profit across the selected quantity. It assumes the entered unit cost contains every variable cost you intend to recover through the sale price.
How to use the Markup Calculator
- Enter the fully loaded unit cost and proposed selling price.
- Optionally enter expected quantity to estimate total profit.
- Compare markup and margin before setting or communicating the price.
Markup = unit profit ÷ unit cost; margin = unit profit ÷ selling price
Unit profit equals selling price minus unit cost. Total profit multiplies unit profit by quantity.
Worked example
At a $60 unit cost and $100 selling price, unit profit is $40, markup is 66.67% and margin is 40%. Selling 250 units produces $10,000 before fixed costs.
Assumptions and limitations
- Fixed overhead is not included unless allocated into unit cost.
- Discounts, refunds, payment fees and tax can reduce realized margin.
- Quantity is used for a simple total and does not model demand changes.
- Use net-of-tax or tax-inclusive values consistently.