Product Pricing Calculator

Calculate Product Pricing step by step: Price = (materials + labor + overhead) × (1 + markup ÷ 100).

In short

Formula: Price = (materials + labor + overhead) × (1 + markup ÷ 100).

Complete the required fields to see the result.

What this calculator does

Calculate Product Pricing step by step: Price = (materials + labor + overhead) × (1 + markup ÷ 100). Worked example, questions and limitations included.

Use it to turn Currency (symbol only, never converted), Materials per unit, Direct labor per unit, Allocated overhead per unit (0 if none), and the other shown inputs into a checked result you can compare, copy, or rerun with different assumptions.

The page shows the formula, a numeric worked example, and the assumptions that affect this business pricing calculation.

Inputs and what they mean

Currency (symbol only, never converted): — choice value.
Materials per unit: — number value.
Direct labor per unit: — number value.
Allocated overhead per unit (0 if none): — number value.
Markup on cost (your choice): — number value.

How to use it

Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
Check the breakdown to see every intermediate step.
Read the limitations before relying on the result.

Formula

Cost-plus pricing as described in OpenStax Principles of Managerial Accounting.

Markup is profit as a share of cost: (price − cost) ÷ cost. Margin is profit as a share of price: (price − cost) ÷ price. The same sale always has a higher markup than margin — 50% markup is only 33.33% margin.

Get the overhead per unit from the cost allocation or predetermined overhead rate calculators.

Price = (materials + labor + overhead) × (1 + markup ÷ 100).

Inputs used: Currency (symbol only, never converted), Materials per unit, Direct labor per unit, Allocated overhead per unit (0 if none), Markup on cost (your choice).

Worked example

A handmade product

Cost = $25.
25 × 1.60 = $40.
Margin = 15 ÷ 40 = 37.5%.

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

Cost-plus only — no demand or competitor input.
Before tax.
Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
The result depends on the values you enter for this product pricing calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

Common questions

Markup or margin?

Does cost-plus guarantee a sale?

No. It ignores what customers will pay and competitor prices.

Should I include tax?

Prices here are before sales tax or VAT. Check the formula, example, and limitations on this page before using the result for a real business pricing decision.

How do I use the Product Pricing Calculator?

Enter the required values for Currency (symbol only, never converted), Materials per unit, Direct labor per unit, Allocated overhead per unit (0 if none), Markup on cost (your choice). The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

What formula does the Product Pricing Calculator use?

Price = (materials + labor + overhead) × (1 + markup ÷ 100). The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.

Can the Product Pricing Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.