In sales functions it is necessary to calculate the profit on an item or total revenue based on receipts and the gross margin established in the price. Here you can calculate the profit on a sale based on the selling price (revenue) and the gross margin built into your selling price. Enter the selling price and your standard gross margin to calculate your gross profit, original cost and the mark up percentage on the cost.
* Revenue = Price (selling price)
- The gross margin percentage is the gross profit divided by the revenue
- G = P / R, therefore
- P = R * G
- The gross profit P is the difference between the cost to make a product C and the selling profit or revenue R.
- P = R - C, therefore
- C = R - P
- The mark up percentage M, in decimal form, is gross profit P divided by cost C.
- M = P/ C
- M * 100 will change the decimal to a percentage.
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