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Calculate a selling price from cost and target margin

Find the selling price needed for your target margin with two calculations. Use 0.2 for 20% and check margin against the selling price.

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Diagram: fictional input for Pricing worksheet
Illustration with fictional data, not a screenshot of the app.

To calculate a price from a target margin, divide cost by one minus the margin. For example, a cost of 80 needs a selling price of 100 for a 20% margin. Adding 20% to cost gives 96, which is a markup calculation instead. Use two Calculate steps in JOIN SHEET to find the required price.

Enter the margin as a decimal and check what cost includes

The fictional amounts share one currency. Target margin is a decimal: 0.2 for 20% and 0.25 for 25%. Decide whether your cost and price definitions include tax or fees before using the calculation; this example does not calculate those charges separately.

Product Cost Target margin
P10 80 0.2
P20 150 0.25
P30 90 0

Calculate the cost share, then divide cost by it

  1. Select Pricing worksheet as the result source, verify that Cost and Target margin are numeric, and open Refine results.
  2. Add Calculate with Subtract. Set A to Fixed number 1 and B to Target margin. Name the output Cost share.
  3. Add another Calculate with Divide. Set A to Cost and B to Cost share, naming the output Required price.
  4. Check the order and choose Apply. Use Divide, since the required output is a price, not Ratio (%).

Diagram: Subtract margin from 1 → Divide cost by cost share → Check profit against price

Check profit against selling price

P10 gives 80÷0.8=100. Profit of 20 divided by price 100 is 20%. P20 needs 200; P30 has zero target margin and returns its cost of 90. A cost share of -19 suggests that 20 was entered instead of 0.2.

Product Cost Target margin Cost share Required price
P10 80 0.2 0.8 100
P20 150 0.25 0.75 200
P30 90 0 1 90

Diagram: Cost 80 with margin 0.2 requires a price of 100.

A 100% target margin creates a zero denominator and a blank result. Higher values are outside this example's pricing conditions. Set rounding, taxes, and commercial terms separately before using a price. Margin on sales and markup on cost use different denominators.

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Sources

The question Calculating suggested sell price based off cost and target margin percentage informed this independently created fictional example.

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