Project Margin Calculator

About the Project Margin Calculator

Calculates the gross margin and the equivalent markup for a project from its cost and selling price.

How to use this calculator

1. Enter the product cost, which is what you paid to make or buy the item.
2. Enter the selling price, which is what you charge the customer.
3. The calculator finds gross margin using the price and cost.
4. It also helps you see markup, which compares profit to cost.

The formula explained

Gross margin tells you what percent of the selling price is profit. The formula is \(margin = \frac{price - cost}{price} \times 100\), and it uses the difference between price and cost.

• margin = gross margin as a percentage
• price = selling price of the product
• cost = cost to make or buy the product

Step by step method

1. Subtract \(cost\) from \(price\) to find the profit amount.
2. Divide that profit by \(price\).
3. Multiply by \(100\) to convert the result to a percent.

Worked example

Problem. A shirt costs \(\$18\) to make and sells for \(\$30\). Find the gross margin.

1. Find the profit: \(30 - 18 = 12\).
2. Divide by the selling price: \(\frac{12}{30} = 0.4\).
3. Convert to a percent: \(0.4 \times 100 = 40\).

Tips and common mistakes

• Gross margin uses selling price in the denominator, while markup uses cost in the denominator. They are not the same thing.
• Make sure you enter cost and price in the correct order, because switching them changes the result.

Frequently asked questions