Enter the total sales revenue ($) and the total direct costs ($) into the Cost Margin Calculator. The calculator will evaluate and display the Cost Margin.

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## Cost Margin Formula

The following formula is used to calculate the Cost Margin.

CM = (SR - DC) / SR *100

- Where CM is the Cost Margin (%)
- SR is the total sales revenue ($)
- DC is the total direct costs ($)

## How to Calculate Cost Margin?

The following example problems outline how to calculate Cost Margin.

Example Problem #1:

- First, determine the total sales revenue ($).
- The total sales revenue ($) is given as: 550.

- Next, determine the total direct costs ($).
- The total direct costs ($) is provided as: 380.

- Finally, calculate the Cost Margin using the equation above:

CM = (SR – DC) / SR *100

The values given above are inserted into the equation below and the solution is calculated:

CM = (500 – 380) / 380 *100 = 31.578 (%)

Example Problem #2:** **

For this problem, the variables required are provided below:

total sales revenue ($) = 640

total direct costs ($) = 134

Test your knowledge using the equation and check your answer with the calculator above.

CM = (SR – DC) / SR *100** = ?**