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Cost, Selling Price & Gross Margin Calculator

Relate a product cost, selling price, profit amount and profit margin on selling price.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

A cost of 80 with a 20% margin requires a selling price of 100 and gives 20 of profit before other expenses.

Selling price = cost ÷ (1 − margin); profit = selling price − cost

Worked example

Enter these known values and leave the other values blank.

Cost used in the model
80 USD
Profit margin on selling price
20 %
Selling price / revenue
100 USD
Revenue less entered cost
20 USD

Assumptions and limitations

  • Margin divides profit by selling price. It is different from markup, which divides profit by cost. This equation requires margin below 100%.
  • Use the same currency and consistent cost basis. This is the difference between the two supplied amounts, not a complete net-income statement; omitted costs, taxes and fees are not deducted. Signed accounting entries require their own interpretation.

Common questions

What markup corresponds to a 20% margin?

With cost 80 and price 100, profit is 20. Dividing by cost gives 25% markup, while dividing by price gives 20% margin.

Can the result show a loss?

Yes. A selling price below cost gives negative profit and negative margin. That arithmetic does not indicate whether the pricing is commercially sustainable.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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