MARGIN
Margin is often expressed as a specific percentage (similar to markup). However, margin uses price as the divisor. If we want to calculate the margin on the Part, here is what that looks like:
EXAMPLE
If Price = $1,200 and
Cost = $500
MARKUP
You can think of markup as the extra percentage that you charge your customers (on top of your cost). The markup formula looks like this:
An example of using the markup formula
If
Cost = $500 and
Price = $1,200
Markup = 1.4
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