Cost Sell Margin Calculator App

Reviewed by: David Chen, CFA

Use this simple, powerful Cost, Sell, Margin calculator to instantly determine the gross margin percentage, selling price, or cost of goods, based on the other two variables you provide. Perfect for pricing strategy and profitability analysis.

Cost ($):

Selling Price ($):

Margin (%):

Result Calculated:

Detailed Calculation Steps

Enter your values and click ‘Calculate’ to see the detailed steps.

Cost Sell Margin Calculator App Formula:

The core relationship between Cost (C), Selling Price (S), and Margin (M) is defined by:


                    % Margin (M) = ((Selling Price - Cost) / Selling Price) * 100
                    

                    Cost (C) = Selling Price * (1 - (Margin / 100))
                    

                    Selling Price (S) = Cost / (1 - (Margin / 100))

Formula Sources:

Investopedia: Gross Margin Harvard Business Review: Pricing for Profit Accounting Tools: Gross Margin Calculation

Variables:

Cost ($): The total expenditure incurred by a company to produce, store, and sell a product or service. Often referred to as Cost of Goods Sold (COGS).
Selling Price ($): The final price at which a product or service is sold to the customer. This is the revenue generated per unit.
Margin (%): Also known as Gross Profit Margin. It represents the percentage of revenue that constitutes gross profit. It shows how much of the selling price is profit.

Related Calculators:

What is the Cost Sell Margin Relationship?

The cost-sell-margin triangle is fundamental to business profitability. Understanding these three variables allows a company to set optimal pricing strategies. Margin is distinct from markup; while margin is calculated based on the *selling price* (revenue), markup is calculated based on the *cost*. This calculator helps you navigate this relationship by solving for any missing variable.

A high gross margin indicates that a business is efficiently controlling its costs relative to the revenue it generates. Conversely, a low margin may signal issues with production costs or a selling price that is too low to sustain healthy profitability, potentially making the business vulnerable to cost shocks or competitive pressures.

How to Calculate Margin (Example):

Identify Knowns: Assume a product’s Cost (C) is $50.00 and the Selling Price (S) is $80.00.
Calculate Profit: Subtract the Cost from the Selling Price to find the Gross Profit: $80.00 – $50.00 = $30.00.
Apply Margin Formula: Divide the Gross Profit by the Selling Price: $30.00 / $80.00 = 0.375.
Convert to Percentage: Multiply the result by 100 to get the Margin Percentage (M): 0.375 × 100 = 37.5%.
Conclusion: The product has a gross profit margin of 37.5%.

Frequently Asked Questions (FAQ):

Is Margin the same as Markup?

No. Margin is the profit divided by the **Selling Price**, while Markup is the profit divided by the **Cost**. If a product costs $50 and sells for $100, the margin is 50% ($50/$100), but the markup is 100% ($50/$50).

What is a good Gross Margin Percentage?

This varies significantly by industry. Retail may target 20-50%, while software or service industries might see 60-90%. A ‘good’ margin is one that covers all operating expenses and leaves a sufficient net profit.

Why is the Margin Calculator important for pricing?

It ensures your pricing is profit-driven. Instead of just adding a markup to your cost, you can calculate the selling price needed to achieve a specific, desired margin percentage, helping you hit crucial financial targets.

Can the Margin value be negative?

Yes. A negative margin occurs when the Cost exceeds the Selling Price (C > S), meaning the product is being sold at a loss.