Markup is the profit expressed as a percentage of the marginal cost, total production cost or total costs, while margin is the profit expressed as a percentage of the sales price.

# How to calculate Markup:

Markup is the extra percentage charged to customers on above of producers actual cost.

The markup formula is,

Markup = (Price – Cost)/Cost

*Example of Markup:*

Suppose, you sell each Television Set for $300 and Costs of Sales of this is $ 200. Hence, Gross profit is = $(300-200) = $ 100.

Using the formula,

Here, Price = $300, Costs of Sales $200.

Mark up is = (Price – Costs)/Costs = $ (300-200)/200 = $100/200 = .50 markup.

The make the markup a percentage, multiply the result by 100,i.e = .50 X 100 =50% markup.

However, some businesses might set their prices based on predetermined markup percentage. The formula in this respect is Cost + (Cost x markup) = Price