GIFSQ Tools · Module 18 — Manufacturing, Costing & Supply Chain · Tool 349 of 500
Price a product with confidence: from the unit cost and the selling price, get the margin per unit, the margin and mark-up percentages, and the profit on the units you expect to sell.
Try sample values — fills the form with the worked example below.
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Margin per unit ($)
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Margin (%)
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Mark-up (%)
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Total profit ($)
Equation: Margin per unit = selling price − unit cost. Margin (%) = margin ÷ selling price × 100. Mark-up (%) = margin ÷ unit cost × 100. Total profit = margin per unit × units sold.
Method: Margin analysis: margin is the share of the selling price kept after the unit cost; mark-up is the same amount expressed against the cost. Both are used in pricing — margin for profit planning, mark-up for setting a price from a cost.
Assumptions: the unit cost is the full cost (material, labour and overhead) from Tool 348; the selling price is before tax and discounts; the units figure is the expected sales volume.
Limitations: fixed costs such as rent are not in the unit cost unless they were allocated into it — the total profit here is the contribution before unallocated fixed costs; discounts and returns are not included.
Rounding: money to 2 decimal places; percentages to 2 decimal places; intermediates unrounded.
This is a calculation aid, not a laboratory report — confirm against your accredited method before citing a value.
Method: Margin analysis: margin is the share of the selling price kept after the unit cost; mark-up is the same amount expressed against the cost. Both are used in pricing — margin for profit planning, mark-up for setting a price from a cost.
Assumptions: the unit cost is the full cost (material, labour and overhead) from Tool 348; the selling price is before tax and discounts; the units figure is the expected sales volume.
Limitations: fixed costs such as rent are not in the unit cost unless they were allocated into it — the total profit here is the contribution before unallocated fixed costs; discounts and returns are not included.
Rounding: money to 2 decimal places; percentages to 2 decimal places; intermediates unrounded.
This is a calculation aid, not a laboratory report — confirm against your accredited method before citing a value.
Worked example: Unit cost $2.50, selling price $4.00, 1,000 units: margin = $1.50 per unit; margin = 37.50%; mark-up = 60.00%; total profit = $1,500.00.
Enter values above to see results.
Do not confuse margin and mark-up: a 60% mark-up on cost is a 37.5% margin on price — quoting the wrong one under-prices the product. Tool 349 of 500 — GIFSQ
