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In cost plus pricing i am good with markup calculations or subtract the margin from the price but i struggle with how to put sales margin on cost.
For markup it,s simple 1.2*100=$120 selling price
The total cost if $100 and after adding the required margin of 20% the price is 125.
Can you show me the working how we calculated the selling price of $125?For every $100 revenue, the profit will be $20 and therefore the cost will be $80.
Putting it the other way round, for every $80 cost, the sales will be $100.
Therefore the selling price will be 100/80 time the cost.
100/80 x $100 = $125.
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