Manufacturing Quote Calculator
Price a quote from cost on a margin or a mark-up, chosen explicitly.
What this calculator does
The chosen method is applied on its own; the result shows the margin and the mark-up achieved side by side so the two are never confused.
Inputs and what they mean
- Currency
- — Amounts are shown in the currency you pick. No exchange rate is applied..
- Material cost
- — number value.
- Labour cost
- — number value.
- Overhead applied
- — number value.
- Other cost (optional)
- — Optional component. Leave at 0 to exclude it from the result..
- Price by margin or by mark-up
- — Margin and mark-up are different calculations and are never mixed. A 25% margin is not a 25% mark-up..
- Margin or mark-up
- — Read as whichever you picked above. Your own figure; none is assumed..
- Units quoted (optional)
- — Optional component. Leave at 0 to exclude it from the result. Used to show the price per unit..
How to use it
- Enter your own figures — the calculator never fills in a rate, price or benchmark for you.
- Press Calculate to see the result.
- Read the formula, variables, assumptions and source below the result before you rely on it.
Formula
Price = Cost ÷ (1 − Margin) when pricing on margin; Price = Cost × (1 + Mark-up) when pricing on mark-up
Worked example
A quote priced on a 25% margin
Margin and mark-up are shown side by side so the two are never confused.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
Results depend entirely on the figures you enter and are rounded for display. They are for general information and education, not professional advice.
Reference: Rice University — Principles of Accounting, Volume 2: Managerial Accounting
Last reviewed:
Common questions
Formula, source and verification
Cost-plus pricing with the method chosen explicitly, because margin and mark-up give different prices from the same rate.
The question it answers: What should I quote for this work so the margin we want actually survives?
The formula
Price = Cost ÷ (1 − Margin) when pricing on margin; Price = Cost × (1 + Mark-up) when pricing on mark-up
- M — Material cost
- (currency). Material in the quote.
- L — Labour cost
- (currency). Labour in the quote.
- O — Overhead applied
- (currency). Overhead in the quote.
- X — Other cost
- (currency). Optional.
- method — Pricing method
- (choice). Margin (share of price) or mark-up (addition to cost).
- r — Margin or mark-up
- (%). The user's own figure, read as whichever method was chosen.
- q — Units quoted
- (count). Optional. Used to show the price per unit.
Units: Currency; percentages; counts.
What kind of calculation this is
Deterministic formula. The same inputs always give the same answer. The maths is fixed and does not depend on judgement.
Method
The chosen method is applied on its own; the result shows the margin and the mark-up achieved side by side so the two are never confused.
Assumptions built into the result
- Industry: Every cost, rate and standard is the figure the user entered, in the currency they chose; no exchange rate is applied.
- Mathematical: Costs and output cover the same period or the same job.
Figures this calculator will never guess for you
- No industry average, benchmark or target cost is supplied.
- No standard rate, wage or material price is assumed on the user's behalf.
- Optional components are excluded from the result when left at zero.
- No standard margin, mark-up or multiplier of cost is suggested.
- Margin and mark-up are never treated as interchangeable.
Limitations
- Arithmetic over the figures entered — it cannot tell whether the costs, standards or allowances behind them are right.
- A target cost, an industry benchmark and the organisation's own standard are different things; only the figures entered are used.
- A cost-plus price; it says nothing about what the market will pay.
Source and version
- Standard or reference
- Managerial accounting — cost-plus pricing — OpenStax (Rice University) (Principles of Accounting, Volume 2: Managerial Accounting (OpenStax) — a price built from cost plus a stated margin or mark-up; margin is profit as a share of price, mark-up is profit as a share of cost, and the two are not interchangeable.)
- Published source
- Rice University — OpenStax (CC BY)
- Formula version
- Version 1
- Verification
- Reviewed against the cited source on
- How much weight the source carries
- Academic
- Applies to
- Currency
- Amounts stay in the currency you choose; no exchange rate is applied.
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