Scope
Assumptions and limits
This planning calculator is not accounting, tax or pricing advice. Validate assumptions for your industry and jurisdiction.
Results use the values you enter and the conventions described in the methodology below. After calculating, review the result-specific assumptions and warnings shown with the estimate.
Explore business and document tools for related tasks in this collection.
01
Margin versus markup
Profit per unit is selling price minus base cost, additional variable cost, fixed transaction fee and any percentage fee. Margin is profit divided by price; markup is profit divided by total variable cost.
At a price of 100 with costs of 40 and 5, a 2.9% fee and a 0.30 fixed fee, variable cost is 48.20 and profit is 51.80. Margin is 51.80% while markup is about 107.47%.
02
Target price and break-even
For target margin m and a price-based fee f, required price is fixed variable cost divided by 1 − f − m. A target at or above the remaining denominator is impossible.
Break-even units are fixed period costs divided by contribution per unit and rounded upward. At a 50 price, 22 variable cost and 10,000 fixed costs, the result is 358 units and 17,900 revenue.
03
Discount and cost limitations
Discounts reduce profit faster than revenue when costs stay fixed. If discounted unit profit reaches zero, no amount of volume can preserve the original unit economics.
VAT, GST, sales tax, refunds, bad debt and inventory loss are excluded unless you incorporate them into the cost inputs.
FAQ
Frequently asked questions
What is the difference between margin and markup?
Margin uses selling price as denominator; markup uses cost.
Why is break-even rounded upward?
A fraction of a unit normally cannot cover the remaining fixed cost.
Does it include VAT or sales tax?
No.
Can a service business use it?
Yes—use labour and delivery costs as variable costs.
What is a good margin?
There is no universal answer; industry, overhead, risk and market conditions differ.
Sources
Method references and scope
Method: results come from tested code using the documented method and assumptions shown on this page.
Review owner: Great Future Product Engineering.
Method and content last reviewed: . Next review due: .