Enter the sales price ($) and the item cost ($) into the Price Margin Calculator. The calculator will evaluate and display the Price Margin.
Price Margin Formula
The following formula is used to calculate the Price Margin.
PRM = (SP - IC) / SP * 100
- Where PRM is the Price Margin (%)
- SP is the sales price ($)
- IC is the item cost ($)
How to Calculate Price Margin?
The following example problems outline how to calculate Price Margin.
Example Problem #1:
- First, determine the sales price ($).
- The sales price ($) is given as: 60.
- Next, determine the item cost ($).
- The item cost ($) is provided as: 30.
- Finally, calculate the Price Margin using the equation above:
PRM = (SP – IC) / SP * 100
The values given above are inserted into the equation below and the solution is calculated:
PRM = (60 – 30) / 60 * 100 = 50 (%)
Example Problem #2:
For this problem, the variables required are provided below:
sales price ($) = 70
item cost ($) = 20
Test your knowledge using the equation and check your answer with the calculator above.
PRM = (SP – IC) / SP * 100 = ?