Target gross margin is a fixed percentage markup that is concerned with gross margin achieved on a specific product based on the final selling price. If you know that your cost is $10 and you know you must achieve a gross margin of 50%.

Selling price = cost/ 1- target margin percentage.

Calculate the required selling price using the formula given above.

M p on Inventory Cost Akup percentage is the average increase in selling price of a product over the cost. If your product cost and your retail selling price is $15, your markup is $5, or 5/10 = 50%. A company that has a set markup pentage can determine selling price for a specific item through the formula presented below. Selling Price = Cost X (1 + Markup %) = 10 x (1 +0.50) = $15 In some industries the selling price is set by the manufacturer to achieve standardized pricing. It can be help- ful for businesses to calculate their markup percentage to determine the profitability of the different products they sell. For example, imagine you work for Best Buy Canada as a sales director for the Apple product line. You have been asked to determine how much each iPad Mini sale contributes to gross profit. The selling price set by Apple is $319. Assume Apple Inc. charges Best Buy $269 for each iPad Mini it purchases. What is the markup percentage on the product? = 18.6% Selling Price - Cost 319-269 Markup Percentage = CS Scanned with CamScanner Cost 269