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

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:

1. First, determine the total sales revenue ($). • The total sales revenue ($) is given as: 550.
2. Next, determine the total direct costs ($). • The total direct costs ($) is provided as: 380.
3. 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