Selling Price from Markup
The price to charge after adding a percentage markup to unit cost.
Formula
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Example
Cost $40 with 25% markup: 40×1.25 = $50
How it works
This formula finds the price to charge for one item when you know its unit cost and the percentage markup you want to add. The markup is written as a decimal and added to 1 because the final selling price must include 100% of the cost plus the extra marked-up amount. For example, a 20% markup means you charge 1.20 times the cost.
When to use it
Use this when pricing products in retail, wholesale, or small business settings, especially when you want a fixed profit margin above unit cost. It is also useful in inventory and budgeting problems where you need to turn a cost into a selling price.
Worked example, step by step
Unit cost = $18 Markup = 30% = 0.30 SP = Cost × (1 + m) SP = 18 × (1 + 0.30) SP = 18 × 1.30 SP = 23.40 Final selling price = $23.40
Common mistakes to avoid
- Using the markup percentage as a whole number instead of a decimal
- Multiplying by 0.30 instead of 1.30, which leaves out the original cost
- Confusing markup with profit margin, which are not always the same thing
Did You Know?
Markup is figured on cost, while margin is figured on price — confusing the two is a classic pricing error.
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