If your costs are $7500 and you mark it up 33% to price the job, assuming that your costs don’t go over budget, what is your margin?
Answer – If you took $750 and marked it up 33%, you’d have added $250 and have priced the job at $1000. You’d have a $250 profit, you have a 25% margin. ($250/$1000)
What markup do you calculate? What margin do you get?
Good morning, I was taught to markup by dividing by the recipicol, $7,500/.67= $11,198.00 my sale price
I have a lot of skepticism about this.
$11,194
We, too, markup by the reciprocal. That way we know the margin is equal to the expected mark-up. For a desired x% margin, we would divide the costs by (1-x). This has allowed for improved margins and more precise targets.