• IC is the item cost ($) • TM is the target margin (%) To calculate target price, divide the item cost by 1 minus the target margin. ## How to Calculate Target Price? The following example problems outline how to calculate Target Price. Example Problem #1: 1. First, determine the item cost ($).
1. The item cost ($) is given as: 60. 2. Next, determine the target margin (%). 1. The target margin (%) is provided as: 30. 3. Finally, calculate the Target Price using the equation above: TP = IC / (1-TM/100) The values given above are inserted into the equation below: TP = 60 / (1-30/100) = 85.72 ($)

Example Problem #2:

For this problem, the variables needed are provided below:

item cost (\$) = 70

target margin (%) = 50

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.

TP = IC / (1-TM/100) = ?