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