1. What is the Price Calculation Formula?

The price calculation formula determines the selling price based on cost and desired profit margin. It's fundamental for business profitability and financial planning.

2. How Does the Calculator Work?

The calculator uses the price formula:

Where:

• \( Cost \) — Original cost of the product/service in USD
• \( Margin \) — Desired profit margin as a decimal (e.g., 0.25 for 25%)

Explanation: The formula adds the margin percentage to the base cost to determine the final selling price.

3. Importance of Price Calculation

Details: Accurate price calculation ensures profitability, covers expenses, and maintains competitiveness in the market.

4. Using the Calculator

Tips: Enter cost in USD and margin as a decimal (e.g., 0.25 for 25% margin). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between margin and markup?
A: Margin is profit as percentage of selling price, while markup is profit as percentage of cost.

Q2: How do I convert percentage to decimal?
A: Divide percentage by 100 (e.g., 25% = 0.25).

Q3: Should I include all costs in the base cost?
A: Yes, include all direct and indirect costs for accurate pricing.

Q4: What's a typical margin for retail?
A: Margins vary by industry but typically range from 20-50% in retail.

Q5: Can this formula be used for service pricing?
A: Yes, it works for both product and service pricing.